Credit: John McCosh/Georgia Recorder
Opponents complain Georgia Power’s planned rate hike will squeeze household budgets
At the onset of Georgia Power’s rate case on Tuesday, lawyers advocating for the public’s interest pressed company officials to disclose whether future plans beyond the 2022 rate case could drive up customers’ bills by 45% over the next several years.
And some of the people who would get the higher electricity bills gave the five-member state Public Service Commission an earful about how their household budget would be strained to the breaking point.
Tia Brightwell, a disabled single mother and business owner from Savannah who said she had to deal with her power being shut off during the pandemic, says that she can’t handle the stress of higher energy costs.
"My businesses are run out of my home, so if you raise my rates how am I going to make it?” Brightwell said during Tuesday’s public comment period. “How am I going to buy medicine? How am I going to go to the doctor? How do I get my kids back and forth to school because I don’t even have a school bus so I’m the cab?”
Other personal testimony came from Eugene Vickerson, a 76-year-old who said in his small rural community of Hawkinsville many people are frustrated with Georgia Power for not managing its business better.
“You’ve got the only dance in town and every time I look around this, there’s another request for higher rates,” Carter said. “It’s not that people don’t want to think that we need lights, but it needs to be reasonable.”
The rate case hearings for the state’s largest electricity supplier began with its top executives advocating that the PSC approve a 12% rate increase on the average residential household by 2025. As the company transitions to cleaner energy generation and newer technologies, it says it is spending $12 billion to shore up its infrastructure and ramping up spending to retire its remaining coal-fired plants and complete toxic coal ash storage storage projects.
If state regulators agree to Georgia Power’s plan as proposed, starting next year the typical residential customers would have $14.32 added to their monthly rates. Smaller increments would eventually top out at $16.29 by 2025, or nearly $200 more annually to keep the lights on.
But PSC attorney Preston Thomas said that amount would be well surpassed when factoring in other expenses the company is expected to recoup within the next several years, starting with a $1 billion fuel recovery that Georgia Power is expected to request early next year, a fee that would further increase the burden on the typical residential ratepayers by another $6 per month.
The fuel recovery would be used to reimburse Georgia Power for money it’s already spent on fuel, as natural gas prices have soared in the past year, and would include projections on future prices.
“So walking through four additional revenue requests that are going to be coming before this commission, would you agree that the impact of all four increases would be in the range of $55 to $60 per month for the typical residential customer, approximately a 45% increase,” Thomas asked Georgia Power President and CEO Chris Womack.
During this year’s rate case, Thomas said it’s important to consider the impact of future requests, since commissioners have more discretion to determine what charges Georgia Power’s 2.7 million customers will absorb.
For years, along with base rates for electricity, a separate line item has been charged to Georgia Power customers for capital expenses on the Plant Vogtle nuclear expansion project. Vogtle’s expansion costs have ballooned to more than double from the company’s initial projection of $14.3 billion.
Meanwhile, the next fuel recovery case is likely to be filed in early 2023 when the first of the two new nuclear power units is scheduled to start running.
Womack said it’s too early to speculate how fuel recovery would affect customers’ bills, since prices can vary greatly by the time the company files its claim.
“We don’t do this in a vacuum,” he said. “Do we know exactly where that number will be by next year? No, we don’t. We are aware of where we are from a fuel balance.
“We pay attention to what the adjustments will be when the Plant Vogtle units go online and they begin to operate to provide our customers in this state with this carbon-free baseload energy,” Womack added. “But I can’t speculate on what the fuel rate adjustment would be.”
Commissioner Lauren “Bubba” McDonald said Georgia Power would only be recuperating fuel expenses in a volatile market where prices have skyrocketed and federal policies made running utilities more expensive. The company can’t control the cost of natural gas or coal.
“It’s not Georgia Power that is making any profit on it,” McDonald said. “It’s not that the commission is recovering or any other reason, but it’s just a pattern.”
The five-member commission is scheduled to vote on the rate case by Dec. 20, but before that big decision day it is receiving input from Georgia residents concerned about another rate increase.
Hearings are scheduled to continue on Wednesday and Thursday, followed by another round in November.
Thomas suggested that Georgia Power and the commission reduce some of the immediate plans for the system’s electrical grid in order to provide some financial relief to ratepayers, who are expected to foot a larger portion of fuel costs and more nuclear bills.
As soon as Vogtle’s Unit 3 begins producing electricity, Georgia Power will have the right to charge customers an additional $302 million, or about $5.20 a month, for expenses that were incurred prior to the construction budget exceeding a $7.3 billion limit set by commissioners and the plants’ owners. According to a Georgia Power executive, if the costs associated with Vogtle’s two units are taken into account, rates would rise by 10%.
On Tuesday, Commissioner Tim Echols asked whether Womack believed delaying some infrastructure investment would undermine the company’s reliability.
“If we did punt some of these upgrades that you’re talking about; on the grid, some of the autonomous controls, what is going to be the impact on the grid if we delay this?” Echols said.
Womack responded that replacing the aging transmission system and shoring up the distribution network that carries the electricity into homes and businesses are critical.
The rate request will support advancements in newer technology like electric vehicle charging stations, upgrade its customer service system and to meet federal and state environmental regulations for retiring its coal-burning plants and closing its 29 coal ash storage ponds and 12 landfills, Womack said.
“We understand that making the investments our customers need will result in additional cost,” he said. “We’re always sensitive to the price of electric service and how it impacts our customers.
“At the same time we must make the necessary investments to ensure we can continue to meet the needs of our customers as Georgia continues to grow,” Womack said. “We work to balance our customers’ need for affordable electricity with our obligation to provide clean, safe and reliable service.”
This story comes to GPB through a reporting partnership with Georgia Recorder.