Georgia Power requests rate increase from Public Service Commission
This commentary is written by opinion columnist Adam Van Brimmer.
The difference between a pat on the back and a kick in the pants is a matter of inches.
With that in mind, the utility regulators of the Georgia Public Service Commission better spend the next week limbering up, because they need to deliver both back slaps and butt boots in a July 21 hearing on Georgia Power.
Kudos for the utility’s long-overdue commitment to shuttering coal plants and investing in renewable energy resources, particularly solar.
Condemnation for treating ratepayers like a broken ATM that spits out dollars like a hen does eggs.
The PSC is poised to approve Georgia Power’s latest version of its Integrated Resources Plan, also known as the IRP, a document outlining the utility’s operating strategy for the next 20 years. The plan is updated and reviewed by the regulators every three years, with the focus on adjustments to the energy resource mix and then associated rate and fee changes.
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The 2022 IRP was released in January and was a revelation — Georgia Power would close nine coal-burning units and three oil-burning units by 2028 and all coal plants by 2035. Meanwhile, the utility would grow solar capacity from 3% to 40% of its portfolio, making sunshine the utility’s second biggest source of energy.
With the new Plant Vogtle nuclear reactors set to enter service next year and generate enough power to light 1 million homes, the clean energy era is dawning for Georgia Power.
Only later would we learn that Georgia Power is going for the green in every sense of the word.
Sticking it financially to rate payers
Georgia Power customers who don’t examine their monthly account statements live in blissful bill ignorance.
Studying the power company’s current statements leaves ratepayers feeling powerless. The fees for “environmental compliance” and “nuclear construction.” The usage info that allows for calculation of kilowatt cost.
The tortuous experience is reason enough to enroll in auto pay.
Georgia Power is now asking for more. Last month, utility officials outlined their request for rate and fee adjustments. They asked PSC regulators to grant them permission to add another $14, on average, to monthly bills starting in January, with additional small bumps to come in 2024 and 2025.
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Georgia Power insists the rate increase is necessary to modernize the power grid and improve customer service — some of the same justifications cited in 2019 when the utility pushed up rates by an average of $6 per month.
The pending hikes won’t be the only ones marring future bills. Georgia Power starts recouping costs on those new nuclear reactors once they go into service next year. That’s another $3.78 a month.
This is not nickel and diming. It’s gouging.
Paying for poor decision-making
Expect the Georgia Public Service Commission to cut the rate increase. Typically, that end of the IRP process is treated as a negotiation, with Georgia Power rarely getting the full ask.
However, the utility traditionally gets most of its requested amount. Georgia Power’s parent company, Southern Company, is publicly owned, and like most utilities guarantees a minimum dividend to shareholders.
Setting rates — or imposing fees — to deliver on those profit promises is vital.
But what’s good for the shareholders is not always what’s best for stakeholders. Georgia Power rationalizes its margin by saying meeting dividend obligations assures a good credit rating and thereby favorable borrowing costs, which are a benefit to ratepayers.
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What’s exasperating is that Georgia Power is spending money — lots of it — to mitigate mistakes. Coal ash cleanup. Catastrophic cost overruns at Plant Vogtle. Stubbornly resisting a more rapid move away from coal and oil over recent decades.
Customers are footing the bill for poor decision making.
All too often the regulators have served as enablers to Georgia Power. PSC members are elected officials, and no incumbent running for re-election has lost a bid in recent memory — making voters, many of them Georgia Power customers, complicit in the fleecing.
The delusion is PSC members will someday pull the plug on the Georgia Power money grab. Next week is their next chance. But don’t be surprised if there are more pats on the back than kicks in the pants.
Contact Van Brimmer at [email protected] and follow him on Twitter @SavannahOpinion.