The five elected members of the Georgia Public Service Commission (PSC) caught an earful Tuesday from Georgia Power customers concerned about the impact the company’s plan to raise customer’s monthly bills by around $16 will have on already struggling households.
For about an hour at the start of the public hearing, several witnesses blasted the rate hike and told commissioners that approval of the increase would inflict more pain on customers, who already pay some of the steepest electricity bills in the country.
Georgia Power ratepayers’ monthly bills already jumped once this year by roughly $4, but the company says another increase is needed to pay for the cost of the coal, gas and nuclear fuel used in its power plants.
When gas prices rose in late 2021 and continued to climb in 2022 after Russia invaded Ukraine, Georgia Power’s rates did not keep pace. As a result, the company says it needs to dig itself out of a nearly $2.2 billion fuel expense hole, plus collect an additional $4.5 billion from customers to pay for its estimated fuel costs over the next two years.
Members of the public said the proposed $16 increase is unacceptable, especially for low- and fixed-income customers.
“There’s no dispute about the rise in fuel costs — the dispute is about how you handle it,” said Sherry B. Williams, a Georgia Power customer and organizer with Georgia Conservation Voters Education Fund. “No one can live without electricity. It should be a right — a civil right — and it needs to be affordable.”
Commissioners claim their hands are tied
The PSC commissioners said there was little they could do to protect customers from the looming increase, claiming Georgia law requires that they pass fuel costs into monthly bills.
District 4 Commissioner Lauren “Bubba” McDonald offered hearing attendees a “civics lesson,” in which he had a PSC staff member read the relevant Georgia statute, which says the commission must adjust rates to allow the company to recover fuel costs.
McDonald said the commission does have the right to audit Georgia Power’s fuel costs and if it discovers discrepancies, it can challenge the company’s request.
“Our staff has looked at this fuel case, everything is in order in this fuel case, and we have the responsibility of making the proper adjustment,” he added.
McDonald also tried to tie the increase to President Biden, claiming the administration’s policies are what sent fuel prices spiking. In Georgia Power’s filed testimony, however, the company attributed the rise in natural gas and coal prices to geopolitical unrest, the COVID-19 pandemic, supply chain constraints and other factors.
Pay more now or spread out costs?
In a deal struck before the hearings, Georgia Power and PSC staff agreed to a framework that will spread the collection of the company’s outstanding fuel bill out over three years, instead of the usual two. Georgia Power says that move — along with submitting recalculated future fuel expenses based on the much lower, current price of natural gas — should cut the fuel charges customers see in monthly bills from an initial estimate of $17 to $23 down to $16.
Georgia Power is also planning to increase the Income Qualified Senior Citizen Fuel Discount it offers from $6 to $8 per month, for which customers 65 and older with a household income of $29,160 or less are eligible. Last year, the PSC also approved a separate increase to the company’s base senior discount, raising it from $18 to $24 per month.
But witnesses in the hearings argued that the commission does have discretion to lessen the financial blow for ratepayers.
Jeffrey Pollock, an energy advisor who testified on behalf of the Georgia Association of Manufacturers, said the commission should spread out the recovery of the company’s fuel tab over at least five years, instead of three.
“Economically speaking, consumers are better off letting the company carry the balance for a longer period than for consumers to pay it off quicker,” Pollock said.
There is precedent for doing so — under cross-examination, PSC staff said the commission had approved longer recovery periods of as long as 48 months in previous fuel cases.
In filed testimony, Georgia Power staff disagreed with that proposal, arguing it would result in “increased total fuel costs for customers” and “increased strain on the Company’s financial integrity.”
‘Perfect storm’ of rate shock
Witnesses on Tuesday also warned of a logjam of rate increases facing Georgia Power customers in the next few years.
Late last year, when commissioners approved the nearly $4 rate hike that took effect in January, they also approved two additional 4.5% increases in the company’s base rates, which are set to take effect in both 2024 and 2025.
Then there is the cost of the two, long-delayed and over-budget nuclear reactors Georgia Power has been building at Plant Vogtle near Augusta.
As soon as Unit 3 enters commercial service, another $3.78 rate increase approved by the PSC will begin hitting customers’ monthly bills, Georgia Power estimates. Additional hikes could follow, with the exact amount to be determined by the commission in hearings expected to start later this year.
“With the perfect storm of rate increases now upon us, the commission really has an opportunity to mitigate the fuel increase and help consumers more gradually adjust to the much higher electricity rates,” Pollock said.
Toward the end of Tuesday’s hearing, Georgia Power staff asked commissioners to approve the fuel cost recovery deal the company struck with PSC staff without modifications.
The commission will take a final vote on the fuel charge on May 16 and the increase would take effect on June 1.
Credit: Steve Schaefer
Credit: Steve Schaefer
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