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FMG Law Blog Line

Georgia Utility Update

Posted on: March 15th, 2012

By Robert Baker

Commission Approves 3.2% Increase in Georgia Power Base Rates

At its March 20, 2012, Administrative Session the Georgia Public Service Commission approved Georgia Power Company’s base rate increase for all customers.  The average tariff increase is 3.2% and will be included in the April billing.  The base rate increase was due to the Company bringing Plant McDonough Units 4 and 5 on line.  An average residential customer will see an increase of $2.46 per month on their bill.  Base rates will increase again in early 2013 when Plant McDonough Unit 6 goes on line.

Georgia Power Amended Integrated Resource Plan Approved

The Public Service Commission approved Georgia Power’s amended integrated resource plan (“IRP”), which will mean significant rate increases for residential and commercial customers due mainly to the multi-billion dollar construction program to build emission control bag houses at several coal generation plants.  The Commission Advocacy Staff estimated ratepayers would see a “ten to twenty percent rate increase for environmental upgrades,…“ (Advocacy Brief, p. 15)

The Commission’s multi-billion dollar decision authorized the Company to: (1) begin construction of bag houses at Plant Bowen Units 1-4, Plant Wansley Units 1 and 2, and Plant Hammond Units 1-4; (2) retire Plant Branch Units 1 and 2 and Plant Mitchell Unit 4C; (3) certify three purchase power agreements (“PPAs”)  and authorize the Company to collect an additional sum of $2.30 per kilowatt; and (4) convert “unusable material and supplies” to regulatory assets to be included in rate base and earn a return on equity.

The Company is planning to file its next IRP case in January 2013.  It is expected Georgia Power will be retiring several more coal plants and seeking rate recovery for the nondepreciated net book value of the plants along with conversion of any unusable material and supplies to regulatory assets.

Georgia Power to File Fuel Cost Case

A procedural and scheduling order has been issued by the PSC directing Georgia Power Company to file a fuel cost case by the end of the month.  Fuel costs are recovered separately from base rates and special cost recovery riders.  It is anticipated the current rate will be rolled back.

Georgia House Passes HB 386

The Senate overwhelmingly passed HB 386 on March 22.  This followed the vote of 155 to 9 in the House of Representatives on March 20.  A key provision of the legislation removes the sales tax on energy used for manufacturing, farming and mining over four years.  HB 386 contained other significant tax changes which clarified Georgia’s current on-line sales tax laws, created a one percent sales tax exemption for commercial aviation and phased out the ad valorem tax on cars.

Update on Other Utility Related Bills

Senate Bill 313 – The Broadband Investment Equity Act died in committee.  Private telephone and cable companies supported this legislation, which would have limited government owned communications service providers from being subsidized with public funds against private companies.

Senate Bill 459 – The “Smart Meter” bill allows customers the option to replace their digital meters with a mechanical meter, and is still alive in the House.  A surcharge could be collected to cover the cost of reading the meter.

House Bill 401 – Never made it out of committee in the House due to very strong utility opposition.  There may be an attempt to attach it to another utility bill, such as the “Smart Meter” bill.

House Bill 520 – Is alive in the Senate and encourages the development of renewable energy by individuals and businesses.  The bill directs electric service providers to purchase up to 2.5% of renewable energy at a price above avoided energy cost.

House Bill 855 – Didn’t make it out of the House, but was intended to reign in the out of control growth of the Universal Access Fund (UAF).  Since 2009 the USF had grown from $9 to $16 million with no end in sight.  HB 855 would have phased out the USF over 3 years.

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

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