State regulators and Georgia Power Co. have agreed on a plan that will increase utility bills by 12% in June to help offset the higher cost of natural gas and coal, which the utility burns to generate electricity for its 2.7 million customers.
The Atlanta-based Southern Co. branch released new numbers Monday, saying it will earn an additional $6.6 billion over the next three years under an agreement it struck with Georgia Public Service Commission officials earlier this month need to collect US dollars from customers.
That’s actually $1.1 billion less than Georgia Power previously forecast due to falling natural gas price forecasts. But that takes the typical household bill to $147.50 per month, up $15.90 from the current $131.60. The increase was originally forecast to be as high as $23.
The five-member elected commission is scheduled to vote on fuel fees on May 16. The final plan will likely be based exactly on the agreement between the company and the employees.
Bill increases are piling up for Georgia Power customers. Interest rates rose 2.5% last month in January after commissioners approved a three-year tariff plan in December. Increases of 4.5% will follow in 2024 and 2025.
Customers also have to bear the costs for the third and fourth nuclear power plant blocks at the Vogtle power plant near Augusta. Block 3 is expected to be operational in May or June, resulting in a monthly increase of around $4 for residential customers. A major tariff increase is likely to follow when Block 4 begins operations, which is now forecast before March 2024.
Typically, a utility is permitted to charge its customers for fuel costs but may not make a profit on those charges, unlike the profits Georgia Power guarantees on investments in power plants and transmission lines. The all-Republican commission usually decides every two years how much Georgia Power can collect for fuel. If prices change in the meantime, the company may be making too much or too little.
During that biennium, although commissioners approved a 15% increase in fuel costs from January 2022, the company raised far too little money. Natural gas prices skyrocketed due to an improving economy and the Ukraine war, and coal prices rose even more, partly due to supply and labor shortages.
Georgia Power says it will end about $4.5 billion in fuel gap already burned. Most of the proposed rate hike will make up that deficit and pay the company back over a period of three years instead of the usual two, given the debt is so high.
The utility believes it will need an additional $2.2 billion to offset future higher fuel prices.
Georgia Power and commission officials have agreed to let the company make major changes to accommodate cost fluctuations between fuel price falls. The agreement would allow Georgia Power to increase or decrease fuel charges by up to 40% in the meantime, instead of the current 15%. Because of the unpaid debts, that opportunity would likely only be used to further inflate customers’ bills over the next two years.
The company and employees also agreed to increase the fuel rebate for low-income seniors from now $6 per month to $8 per month.
The Georgia Association of Manufacturers argues that commissioners should stretch deficit repayments over five years to reduce tariff increases. Georgia Power said Monday it was against a longer payback period.
Environmentalists argue that commissioners should force Georgia Power to shoulder some of the rising fuel costs because the company has switched its generation portfolio to natural gas, the price of which is fluctuating. The company argues that the Commission has already approved the current power generation mix as the most economical and reliable option.
