On Dec. 20, the Public Service Commission approved Georgia Power’s three-year $1.8 billion rate increase for its 2.7 million customers who will foot the bill for toxic coal ash cleanup costs. Photo of Plant Hammond courtesy Coosa River Basin Initiative
Starting in June, Georgia Power customers could experience another bout of sticker shock when they get their monthly bill as the state’s largest utility seeks to recoup billions of dollars in unbudgeted fuel expenses.
Georgia Power officials predict that its unrecovered fuel expenses over the last couple of years ending in May will reach $2.6 billion, which would add $17 to $23 per month to the typical resident’s bill. The company blames skyrocketing fuel prices after the rate of inflation spiked last year.
By Monday, the company plans to update state regulators about the latest natural gas prices and how much money it wants to be reimbursed, along with future projected costs for fuel sources that generate electricity for 2.7 million homes and businesses across the state.
The five-member Public Service Commission will hold hearings on the fuel cost recovery case on May 2nd and 3rd. It is scheduled to make its final decision on May 16.
Customers would pay for the next phase of excess fuel costs over a three-year period starting in June, according to an April 12 stipulation agreement signed by Georgia Power and the commission’s public interest advocacy staff.
Clean energy advocates and consumer watchdogs are worried about the financial blow to Georgia Power ratepayers who continue to spend significantly more on utilities as part of a three-year electricity rate hike, for toxic coal ash cleanup and for the Plant Vogtle nuclear plant expansion that will take decades to pay off.
The company is seeking reimbursement for fuel costs from the last two years as well as projected expenses for the next two years.
Georgia Power spokesman Jacob Hawkins said the company does not profit from its fuel spending, and that it monitors fuel costs so that it makes the best use of resources.
“At Georgia Power, we understand that energy costs are an important part of every family’s and business’ budget,” he said. “That’s why we work every day to run our business efficiently, keep rates as affordable as possible and proactively take measures to protect customers from rising costs, including deploying the most cost-effective generation resources, increasing our senior citizen discount and more.“
The public service commission in Georgia has little control over how much utilities are reimbursed for fuel expenses. According to Georgia law, power companies have a legal right to recover fuel costs, unless they have made illegal or unreasonable charges.
But the Sierra Club’s Charline Whyte said that a stipulation agreement that only reduces fuel expenditures by $7 million is another example of Georgia Power avoiding its responsibility to best manage fuel costs and risks.
The Sierra Club of Georgia and the Southern Alliance for Clean Energy are critical of the PSC staff and Georgia Power for reaching an agreement before intervenors were able to ask questions or file expert witness testimony.
Whyte says the agreement would also set set a dangerous new precedent allowing Georgia Power to unilaterally raise fuel costs by as much 40% without triggering a full case review involving state regulators and expert testimony. The maximum amount that can now fuel costs can be adjusted in between cases is 15%.
The rate case proceedings are critical for providing a layer of transparency on issues that have significant implications for families and businesses, said Whyte, the senior campaign representative for the Sierra’s Beyond Coal Campaign.
“Sierra Club was looking forward to meaningfully engaging with this process, but it seems like since the staff and (Georgia Power) have already reached an agreement, that engagement and testimony won’t be relevant to the final decision,” she said.
“The commission itself still has the opportunity to review the prudency of the stipulation, and to take into consideration the testimony of all intervenors and to listen t protect the public’s interest,” Whyte said.
Sierra Club and clean energy alliance are advocating for the PSC to take time to develop a method of having Georgia Power cover a portion of for extra fuel expenses.
Jeremy Kalin, a clean energy expert for the Sierra Club and alliance, said if utilities are responsible for 5% to 10% of overrun fuel expenses, it reduces the burden on ratepayers and motivates the electric companies to protect their profits.
The current system in Georgia insulates the decision maker from the financial consequences, said Kalin, an attorney for Minnesota-based Avisen Legal.
“This case is a prime example where Georgia Power is responsible for procuring all the fuel to generate power, but all of the ramifications and costs for that fuel are paid for directly by the ratepayers,” he said.
PSC spokesman Tom Krause said the agreement represents a compromise between the advocacy staff and Georgia Power. A final decision will be made by the elected commissioners who will consider input from the public and other stakeholders while following Georgia law governing fuel reimbursement, he said..
During utility rate cases, the PSC accepts written public comments and allows time for people to comment at hearings. Intervenors, which primarily comprise clean energy organizations, business and industry associations, government agencies and consumer advocacy groups, will provide expert testimony and can cross examine Georgia Power officials and consultants.
The fuel cost recovery case follows a $1.8 billion base rate increase started with a 3% hike in January, raising residential customers’ bills by an average of $3.60 per month. Those rates will go up another 4.5% in the next two years. Meanwhile, Georgia Power customers will be saddled with more expenses tied to the snakebitten Plant Vogtle where the company says two nuclear energy units are now on track to be in operation within the next year.
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