Georgia Power proposes a 12% increase in bills, with a jump in 2023
ATLANTA — Georgia Power Co. wants to raise customer bills by 12% over the next three years to pay for system upgrades and higher costs and enable higher profits, the company said Friday in a rate filing with state regulators.
The filing kicks off a tariff case before the Georgia Public Service Commission, with the five commissioners likely to vote on the plan in December and new tariffs taking effect in January. Changes are likely before any vote.
A residential customer who uses 1,000 kilowatt hours of electricity per month pays Georgia Power an average of $128 per month now, chief financial officer Aaron Abramovitz said Friday. According to the plan, this would increase by $14.32 in 2023, reaching a total of $16.29 over the three-year period.
But those aren’t the only price increases Georgia Power’s 2.3 million customers could face next year. The Public Service Commission has already approved the company’s plans to raise rates by $3.78 a month as soon as the first of two new nuclear units being built at the Vogtle plant come online.
The company will also file next year to recoup the cost of the coal and natural gas it uses to power its power plants, and Georgia Power President and CEO Chris Womack acknowledged on Friday that the company will file. probably in February 2023 to increase the bills to be paid. more for fuel, but pledged to work with the stewards to “mitigate and minimize the impact on our customers”.
All of this could result in bills increasing by more than 15% for customers in 2023 alone.
“Too many Georgians are already struggling to pay their electric bills,” said Liz Coyle, executive director of consumer advocacy group Georgia Watch. “This new rate hike would significantly increase the household budget.”
As has been traditional with regulated monopoly utilities, Georgia Power shareholders of the Atlanta-based Southern Co. would be protected from risk and guaranteed a profit. Georgia Power would receive an additional $2.8 billion over three years, compared to a cumulative increase of $1.77 billion in the current three-year rate plan.
The company says it needs more money to continue making improvements to the transmission and distribution network, retire old coal-fired plants, acquire power from new sources and upgrade systems computers for customers. He wants nearly $100 million more every year just to cover the inflation of what he has to buy and spend.
“It is this balance that recognizes that we must continue to invest in our system, to the reliability and resiliency we need to operate the system and for a state that develops in customers who have increasing expectations” , Womack said.
About $750 million over three years would go to shutting down coal-fired power plants and buying power from natural gas, solar and other plants. Of this amount, about half would be used to repay the book value of closed factories. The moves are key parts of the company’s long-term production plan which commissioners are expected to approve next month. Parts of the rate case are intended to pay for this integrated resource plan.
The company would raise $400 million over three years to cover or excavate ash ponds at coal-fired power plants. Environmentalists want all the ashes excavated and reburied in lined landfills, which could cost even more.
The company also says it needs more money because it used tax benefits from a previous federal tax cut that kept rates at $220 million a year. Georgia Power is also looking to raise its return on equity target, a figure that is helping to boost the company’s earnings, from 10.5% to 11%. The utility argues that it should earn a higher rate of return because of what other utilities are doing and the current state of financial markets. This would cost customers an additional $94 million per year.
Some costs would decrease. Georgia Power says it needs to collect less to pay for storm damage because it has now paid recovery costs from previous storms and less to pay for operations and maintenance because it shuts down older power plants.
The proposal is strongly anticipated, with only small increases sought in 2024 and 2025. Company officials said that would actually mean lower rate increases overall, because if they postpone some of the total demand in later years, rates would have to climb even higher to collect the same amount of money in less time.
“What we’re trying to present here, what we’re asking for, is the lowest cost option for customers, knowing that’s just the beginning of that process,” Abramovitz said.