The approved prices would cost customers less than Georgia Power’s initial proposal, which would have raised prices by $2.9 billion over three years. It also reduces the price increases that will start on January 1 by about $11, down from the roughly $15 increase in average monthly bill that the company proposed in the first year of the plan.
However, it is three times greater than what PSC employees have argued is necessary to maintain reliability and keep the company on a strong financial footing.
Georgia Power President, CEO and President Chris Womack, in a statement, applauded the committee’s decision.
“Since the initiation of the price request process, we have required PSC to set prices at a level that will support the essential and critical investments needed to meet our state’s evolving energy needs,” Womack said. “Today’s resolution does just that while also balancing customers’ affordability needs.”
In the end, the plan approved by the committee is similar to what was outlined in a deal between Georgia Power, PSC employees and some third parties last week. However, the five elected commissioners made decisions on Tuesday on some important items, on which the company and employees failed to reach an agreement.
On Tuesday, Chairman Pridemore passed a proposal 4-to-1 to drop a hair — from 12% to 11.9% — the upper end of the dividend group that dictates how much earnings a company can keep, with McDonald voting against the move.
On a quarterly earnings call in October, Southern, Georgia Power’s parent company, said its earnings this year were up nearly $1 billion compared to 2021. However, Pridemore said it opposed any further cut because “…in the current environment In an environment of rising interest rates and record inflation, it is important to keep the company close to current range levels in order to maintain the company’s financial integrity and efficiency incentives to ultimately benefit customers.”
Georgia Power also received approval to keep its earnings target at 10.5%, 1% above the national average for a comparable electric utility.
MacDonald proposed several amendments that would reduce the company’s profits, but all of these failed to succeed. The Commissioners unanimously approved a measure to convert the share of profits in excess of 12% that Georgia Power is required to return to its customers from the 10% in the previous transaction between the company and PSC employees to 40%. The move also lowered the portion Georgia Power could use to pay off asset liabilities — on which it earns interest — from 70% to 40%, while keeping the company’s dividend cut at 20%.
In addition to preserving its large share of the profits, Georgia Power has succeeded in its fight to keep its popular “net metering” pilot program for rooftop solar from expanding. The program, created by PSC in 2019, allows customers who have solar panels installed on their roofs to be credited for the extra electricity that is sent into the grid at a higher rate, allowing households to significantly reduce their bills. But the beta had a maximum of 5,000 participants and has been full since the summer of 2021.
Georgia Power claimed that net metering participants reap the benefits of connecting to the company’s network without paying for its maintenance.
On Tuesday, the commissioners left the current cap in place, but increased the amount the company must owe other rooftop solar customers for their excess capacity by 4 cents per kilowatt-hour.
Environmental groups and solar advocates were disappointed with the commission’s decision.
“Customers need more options to control spiraling costs, such as rooftop solar access,” said Jill Keysor, leader of the Solar Energy Initiative and senior attorney at the Southern Environmental Law Center. “By failing to expand the net metering program, the Commission missed an opportunity to allow people to reduce bills and create new local jobs in Georgia.”
While Georgia ranks in the top 10 countries for total solar power, most of that is in the form of huge arrays of panels, like those operated by Georgia Power or its contractors. But when it comes to rooftop solar panels, many witnesses at the hearings testified that Georgia ranks in the high 40s.
Solar supporters said the state is likely to stay there after the commission’s decision.
“It is disappointing that PSC’s failure to expand the pilot program and offer only a temporary increase in exported power will keep the state’s rooftop solar sector at the bottom of the national rankings,” said Kevin Lucas, senior director of Utilities Regulation and Policy. Solar Energy Industries Association.
This rate increase is not the last that customers are likely to see in the coming months and years.
Early next year, Georgia Power is expected to file a price hike request to cover the cost of the coal and gas it burned at its power plants. Then there are the billions spent on the two new nuclear reactors at Plant-Vogtel, which are more than five years behind schedule.
If fuel is loaded into the second of the two units as expected next summer, the company can ask the PSC to begin reviewing whether it can “wisely” charge customers for the costs incurred.
Combined with the price increase approved Tuesday, PSC staff estimated that fuel costs and Vogtle could raise the average monthly customer bill by $55 to $60 compared to current levels.
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