Beginning in June, Georgia Power customers could get another shock when they get their monthly bill as the state’s largest utility tries to recoup billions of dollars in unbudgeted fuel costs.
Georgia Power officials predict that unreimbursed fuel costs will reach $2.6 billion in recent years through May, adding $17 to $23 a month to a typical resident’s bill. The company blames skyrocketing fuel prices after inflation spiked last year.
By Monday, the company plans to notify state regulators of the latest natural gas prices and reimbursement levels, along with projected future costs for fuel sources that generate electricity for 2.7 million homes and businesses statewide.
The five-member Public Service Commission will hold hearings on May 2-3 on the fuel cost reimbursement case. She is due to make her final decision on May 16.
Customers would pay for the next phase of excess fuel costs over a three-year period beginning in June, according to an agreement signed April 12 by Georgia Power and staff of the Public Interest Commission.
Clean energy advocates and consumer advocates are concerned about the financial hit to Georgia Power ratepayers, who continue to spend significantly more on utilities, cleaning up toxic coal ash and expanding the Plant Vogtle nuclear power plant as part of a three-year electricity price hike that will take decades to settle pay off.
The company is requesting reimbursement of fuel costs for the past two years and estimated expenses for the next two years.
Georgia Power spokesman Jacob Hawkins said the company is not profiting from its fuel spend and is monitoring fuel costs to make the best use of resources.
“At Georgia Power, we know that energy costs are an important part of every family’s and every company’s budget,” he said. “That’s why we work every day to run our business efficiently, keep rates as affordable as possible, and take proactive steps to protect our customers from rising costs, including deploying the lowest-cost generation resources, increasing our senior discount, and more.” .”
The Georgia Public Services Commission has little control over how much utilities are reimbursed for fuel costs. Under Georgian law, energy companies have a legal right to reimbursement of fuel costs unless they have charged illegally or unreasonably.
But the Sierra Club’s Charline Whyte said a contract agreement that cuts fuel spend by just $7 million is another example of Georgia Power shirking its responsibility to best manage fuel costs and risks.
The Sierra Club of Georgia and the Southern Alliance for Clean Energy have criticized PSC workers and Georgia Power for reaching an agreement before interveners could ask questions or submit expert testimony.
According to Whyte, the deal would also set a dangerous new precedent that would allow Georgia Power to unilaterally hike fuel costs by up to 40% without triggering a full review of the case involving state regulators and expert testimony.
The rate case process is critical to providing a layer of transparency on issues that have a significant impact on families and businesses, said Whyte, senior campaign representative for Sierra’s Beyond Coal Campaign.
“Sierra Club looked forward to meaningfully participating in this process, but it appears the staff and (Georgia Power) have already reached an agreement that engagement and testimony are not relevant to the final decision,” she said.
“The Commission itself still has the opportunity to review the prudence of the provision and to consider and listen to the testimonies of everyone involved in order to protect the interests of the public,” Whyte said.
The Sierra Club and the Clean Energy Alliance are advocating that the PSC take the time to develop a method for Georgia Power to absorb some of the additional fuel costs.
Jeremy Kalin, a clean energy expert for the Sierra Club and Allianz, said when utilities are responsible for 5% to 10% of inflated fuel costs, it reduces the burden on tariff payers and motivates electric companies to protect their profits.
Georgia’s current system isolates the decision-maker from the financial consequences, said Kalin, an attorney with Minnesota-based Avisen Legal.
“This case is a prime example of Georgia Power being responsible for sourcing all the fuel to generate electricity, but all the impact and costs of that fuel being paid directly by taxpayers,” he said.
PSC spokesman Tom Krause said the agreement represents a compromise between advocacy staff and Georgia Power. A final decision will be made by the elected commissioners, who will consider input from the public and other stakeholders while following Georgia’s fuel refund law , he said.
In utility charge cases, the PSC accepts written public comments and gives people time to speak at hearings. Stakeholders, which primarily include clean energy organizations, business and industry associations, government agencies and consumer groups, will provide expert testimony and cross-examine Georgia Power officials and advisers.
The fall in fuel cost coverage follows a $1.8 billion increase in the base rate, which started with a 3% increase in January and increased consumer bills by an average of $3.60 per month. These rates will increase by a further 4.5% over the next two years. Meanwhile, Georgia Power’s customers are being hit with more costs linked to the snakebite-ridden Vogtle plant, where the company says two nuclear power units are now on course to come online within the next year.
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