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Monday, September 30, 2013 - 1:00am

Hearings Begin For Georgia Power Rate Hike

State utility regulators begin hearings Tuesday on Georgia Power’s request to increase rates by nearly $8 a month for the typical customer.

All told, the increase will generate an additional $482 million for the company, which officials say is needed to offset higher costs and lower revenues from customers using less energy.

“You know, nobody’s excited to hear that rates may be going up, of course,” said John Kraft, a Georgia Power spokesman. “But over the past quarter-century, Georgia Power’s total retail rate has averaged more than 13 percent below the national average. That’s something we work very hard to make sure, that our customers are receiving good value.”

If the state Public Service Commission approves the new rates, they would take effect in January and hold steady through the end of 2016. Commissioners will vote on the request in December after hearings this week and in early November.

In filings with the PSC, Georgia Power officials said the company needs to spend $6.8 billion on the power grid and other infrastructure to maintain reliability.

“That includes environmental controls. It includes transmission and distribution lines to ensure our grid is robust and is going to be able to provide the electricity our customers need,” Kraft said. “[It includes] generation resources and smart-grid technologies. Those kinds of things.”

Georgia Power also expects to pay $132 million to comply with new environmental rules, such as clean-air requirements for coal plants. And the company also builds in 10 percent to 12 percent “return on equity” -- profit.

“With this kind of a large building program that we have underway, we have to be able to attract investors, attract the capital to run the business,” Kraft said. “We have a balance of new capital from our investors and our owners, our shareholders, as well as borrowing.

“So, yes, we do have to maintain a good return so that we can continue to attract that kind of capital [and] those kinds of investments.”

The PSC hearings begin at 10 a.m. October 1 and could continue into October 2 and 3. Click here to stream the hearings live.