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Georgia Utility Update –- April 2012

Posted on: April 11th, 2012

By Robert Baker

Georgia Power Files Fuel Case

Georgia Power Company filed a fuel cost case which will reduce fuel costs to all consumers.  The average residential consumer’s bill will decrease by 6% or $8.00 a month.  In its filing the Company stated that it expects the under recovered balance to be fully recovered by March 31, 2012.  In August 2006 the under recovered fuel balance peaked at $995 million.  According to the Company’s pre-filed testimony, “[t]he Company’s fuel costs have declined significantly, primarily driven by decreases in the cost of natural gas and decreases in demand for electricity, coupled with recent mild weather.” [The Recession and natural gas fracking]

In addition to the rate reduction Georgia Power is asking the Commission to include in the fuel cost recovery $41.9 million in natural gas pipeline costs for Plant McDonough and to allow the company to change the Interim Fuel Rider (“IFR”) so that it can implement an automatic increase if the under collected balance is greater than $200 million.  The current IFR permits the company to automatically raise rates without a hearing if the balance is over $75 million but below $100 million.  A decision by the Commission is expected by June 21, 2012.

 Proposed New Fuel Rates

Average Rate        Transmission       Primary      Secondary

Winter                  3.2385                  3.1778                  3.2244        3.2484
(Oct – May)
Summer                3.9082                  3.8349                  3.8912        3.9323
(June – Sept)

Sixth Vogtle Construction Monitoring Report Filed – Project Over Budget

Georgia Power Company filed its sixth semi-annual construction monitoring report covering the period of July 1, 2011 through December 31, 2011.  In its filing the Company stated that it may exceed its $6.113 billion certified amount and “seek an amendment to the EPC (Engineering Procurement and Construction) Agreement and the Certificate, . . .”  According to the company’s filing, “[t]here are three broad categories of possible cost increases resulting from submitted and potential change orders.”  Pending change orders from Westinghouse and Stone & Webster, design changes made by the Consortium during the Design Certification Document review process and costs associated with the delays in the commercial operation date are identified as the areas for the potential cost increases.

What does this mean for all Georgia Power customers?  It means the project construction costs are over budget and the construction phase of the project has just begun.  Hearings in the case begin May 9, 2012.

Renewable Energy Bills Fail in 2012 Legislative Session

Senate Bill 401 and House Bill 520 never got to see the light of day during the 2012 Legislative Session.  Both of these bills would have eliminated regulatory barriers to developing renewable energy resources in Georgia and provided businesses with the opportunity to develop renewable energy options.

Senate Bill 401 would have allowed consumers to develop distributed generation facilities, such as solar photovoltaic systems, by purchasing, leasing or entering into a power purchase agreement.  Forty-three states allow consumers to lease or use power purchase agreements.

House Bill 520 would have increased the amount of customer generated renewable energy that electric service providers would have to purchase from 0.2% of the utilities annual peak demand to 2.5%.  This amendment to O.C.G.A. Section 46-3-56 would have allowed customers to sell their excess generation to their electric service provider.

For more information, contact Robert Baker at 770.818.4240 or[email protected].

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