Georgia Power’s long campaign for state approval to sign off on a 12% rate hike nears final showdown
The final several weeks of Georgia Power’s $2.9 billion rate case will determine whether state regulators sign off on plans for customers to pay hundreds of dollars more per year to keep the lights on.
On Dec. 20, the Georgia Public Service Commission is set to vote on the months-long 2022 rate case. This week marks the end of expert testimony as environmental and consumer watchdog groups hope to curb a dramatic increase to electricity costs charged by the state’s largest utility provider. After the pending rate case is settled, customers will likely absorb more hits to the wallet in 2023, as Georgia Power seeks compensation from higher fuel costs and for expenses tied to the snake-bit nuclear plant expansion at Plant Vogtle.
The deadline for parties to explain their positions on Georgia Power’s rate case is in December before commissioners are scheduled to vote on the company’s proposal Dec. 20. The decisions will affect 2.7 million customers in Georgia.
Tuesday and Wednesday are the last days set aside for expert witness testimony regarding Georgia Power’s proposal for an 12% hike in residential electric rates.
Georgia Power’s proposal would increase a typical household’s bill more than $195, or $16.29 per month. In 2023, the worst sticker shock would be $14.32, followed by smaller increases in 2024 and 2025.
The Sierra Club of Georgia is among the environmental groups pushing for Georgia Power customers to testify during this week’s public comment period about the harm that higher rates could do to their finances.
Brionté McCorkle, executive director of Georgia Conservation Voters, said that members of the state PSC must take into account the many Georgians struggling to make ends meet.
“This is not just a metro Atlanta issue,” McCorkle said. “This isn’t just a poor Black folks issue. Everyone is feeling the strain economically right now.”
Georgia Power CEO Chris Womack has said that the company is preparing for a rapidly changing energy future as it tries to become carbon neutral by 2050.
“At Georgia Power, our customers are, and will always be, at the center of all we do,” Womack said earlier about the rate case hearings.
Georgia Power says the planned billion dollar investment in the electric grid will reduce power outages for customers and help build for a growing population. As it transitions from fossil fuel-based electricity to renewable energy, the company is allocating a large amount of funding to transmission and distribution wire projects, a cost critics say calls for an independent monitor.
Coal ash cleanup tab
So far, Georgia Power has recovered hundreds of millions of dollars in coal ash cleanup costs from its customers and its executives have said it expects to ask the PSC to approve more cost-shifting to ratepayers next year.
Georgia Power is asking for reimbursement for coal ash cleanup and intends to seek to recover fuel costs tied to skyrocketing natural gas prices in a volatile energy market.
An Ohio utility was ordered last week by the Environmental Protection Agency to stop dumping coal ash into unlined storage ponds and ramp up cleanup efforts. Georgia Power has been sealing toxic ash in unlined pits at some of its coal-fired plant cleanup sites as it prepares to close the two polluting power generators still operating.
Since 2020, Georgia Power’s customers have been paying coal-related cleanup fees and analysts for the state’s largest electricity generator are forecasting another $1.1 billion in costs to clean up coal ash ponds and store the waste in landfills in the next several years. The utility provider is asking commissioners to approve a cap-in-place method that will leave coal ash in groundwater instead of permanently sealing ash ponds, as has been done in North Carolina and other locations.
Charline Whyte, senior campaign representative for the Sierra Club’s Beyond Coal Campaign, said that the EPA’s decision is a game changer for the environment since it sides with a safe method of getting rid of the toxic waste.
“I just don’t see a scenario where the Public Service Commission doesn’t have a duty to look into the legality of closing without a liner,” she said. “This issue should be taken into consideration during this rate case because Georgia Power is asking for money from the customers to recoup the costs.”
“Our position is that ratepayers should not have to pay to clean up coal ash at all but if they do, it should only be for the safest option which is full excavation and removal to lined landfills,” Whyte added.
Rate case discussions over the last few months have also focused a great deal on the prospects for more solar-powered residences and businesses.
The company claims non-solar customers are subsidizing the ones employing green technology. Georgia Power opposes continuing its monthly solar pilot program that reached its cap in 2021 of 5,000 customers. Moreover, the utility plans to charge customers $200 for rooftop solar connections to its electrical grid.
But the solar energy and environmental organizations weighing in on the rate case claim Georgia Power is misrepresenting why its rates are going up. They argue that the spread of solar use in Georgia’s market is small and the costs shifted to non-solar customers is negligible.
Commissioner Tim Echols has taken issue with the company’s plans, arguing that it could help define energy modernization in Georgia.
“It shows the kind of paltry penetration of rooftop solar in Georgia compared to other states, including neighboring states like Florida and South Carolina, and even Tennessee,” said Bryan Jacob, solar program director for Southern Alliance for Clean Energy.
The dispute pits how much profit Georgia Power shareholders should make against a chance for consumers to pay less for the utility company’s services. Georgia Power is asking commissioners to approve a 11% return on equity, a half-percent increase over its current return, which translates into about $94 million in additional benefit to shareholders per year.
In January, finance and insurance company Fitch Ratings reported that utility companies’ authorized returns remained relatively stable for the past two years at a median average of 9.5%.
“If they raise the rates 12% again this year and they get all these additional increases (in 2023), then another three years from now, it’s gonna be another rate case, and they’re gonna come to us with another dramatic sob story about why they need even more money,” McCorkle said.
“It’s not a lot when you put it in the context of things like Plant Vogtle, this billion dollar boondoggle that’s sucking all the money out of the room,” she said.
Former Colorado Public Utilities Commission chairman Ronald Lehr, who is an expert witness for the Southern Alliance for Clean Energy, said Georgia Power should come back to regulators for a review every year to account for tax credits, rebates, and other savings available under the federal Inflation Reduction Act. The law was not in place when the company filed its rate case early this year.
“It would be imprudent to approve the next year rate plan the way Georgia Power has proposed it without taking any of that money into consideration,” Jacob said.