ATLANTA — Georgia Power Co. and regulatory staff reached an agreement Wednesday that would give the company a nearly $1.8 billion rate increase over three years — if Georgia’s five elected public service commissioners approve, according to AP.
That’s a little above the midpoint between the $2.9 billion that the electric utility proposed and the $529 million that staff said was justified. It’s about the same as the $1.77 billion Georgia Power got in 2019, when it and staff members never reached a bargain.
A residential customer who uses 1,000 kilowatt hours of electricity per month pays Georgia Power an average of $128 a month now, the company has said. Under the plan, that would rise by $3.60 a month in January, an increase of 2.5 per cent. Increases of 4.5 per cent would follow in 2024 and 2025, staff lawyer Preston Thomas wrote in a letter to commissioners.
Commissioners are likely to first consider the deal at a committee hearing on Thursday before a final vote scheduled Tuesday. The proposal punts two key decisions to commissioners — how much Georgia Power should pay for electricity generated by customers with solar panels and what the profit band should be for the largest subsidiary of Atlanta-based Southern Co.
Georgia Power’s proposal had been frontloaded to get almost all of the rate increase in 2023 from its 2.7 million customers. Instead, it will raise rates in the traditional yearly steps.
The lower amount in the first year could ease customer pain as other bills come due. Georgia Power is likely to ask the commission early next year to let it charge more to cover higher natural gas costs. The commission has already approved an increase when the third nuclear reactor at Plant Vogtle begins generating electricity, also likely early next year. And a larger Vogtle-related increase would come when the fourth reactor is finished, possibly in 2024.
Public Service Commission staff had warned that all the changes could increase bills $55 to $60 month, or 45 per cent.
Staff and Georgia Power agreed to keep its return on capital targeted at 10.5 per cent, a level critics say is too high. Staff had wanted to lower that return on equity to 9.45 per cent while the company sought to increase it to 11 per cent. Avoiding the increase saves customers $300 million over three years. But commissioners must decide where to set the return-on-equity band, which now runs from 9.5 per cent to 12 per cent. Below that, the company could ask for a mid-cycle rate increase. Above that, most money would go to pay down the value of coal and other power plants the company is retiring.
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