SAVANNAH, Ga. (WSAV) – Countless companies are being hit with higher operating and safety costs due to COVID-19. and now Georgia Power is line to collect those higher costs from customers. Several weeks ago, the Public Service Commission (PSC) voted 3 to 2 to allow the company to include the expenses as part of its next rate case in 2022.
“I want to support the actions the company is taking to make sure that Georgians have uninterrupted electric service,” says Chuck Eaton who is the chair of the PSC.
Eaton says costs submitted will be reviewed but the vote signals that the PSC will be amenable to allow the Utility to recoup costs its says are associated with the safety and operational issues surrounding the pandemic.
Georgia Power spokesman John Kraft emailed this statement :
“These additional operational costs incurred due to COVID-19 are necessary to protect our workers who maintain the reliability of electric service essential to our local communities and state through this pandemic. Costs include personal protective equipment, cleaning supplies, and cleaning services to safely protect personnel critical to maintaining 24/7 operations and service. Similar to storm cost recovery, these pandemic-related costs will be deferred for consideration in the company’s 2022 base rate case.”
Eaton told us there’s nothing more important right now that a stable electric supply. “Especially when so many people are having to shelter in place,” he said.
He says the many costs and investments that Georgia Power has had to make to ensure safety and continuity in service are vital. “They put mobile housing units in a number of areas in case they had to quarantine employees within the plant,” says Eaton. “They had doctors and nurses on site so these are expenses that are so out of the ordinary that I voted to allow them recovery on that.”
Public Service Commissioner Lauren “Bubba” McDonald however sees the issue differently. “I just think that it’s exorbitant to ask for that. I think it was unnecessary,” he told us.
McDonald says Georgia Power is currently charging more in base rates as per a case decided in 2019 by the PSC. “And Georgia Power is guaranteed, according to their rate case last year which I opposed,. a 10.5 % ROE (Return on Equity) and any business in today’s marketplace would love to have a 10.5 Return on Equity guaranteed.”
McDonald says he thinks that the company’s investors, not customers should “eat” some of these costs. “I think the investors have to take some responsibility in it,” he said.
Public Service Commissioner Jason Shaw was the second “no” vote. He told us he thinks Georgia Power is a good company and a well run company but he has concerns about whether the attempt to recover COVID costs should have received a green light so soon. He says the company’s balance sheet may also ultimately show fewer expenses in such things as travel. Shaw also acknowledged that PSC staff had recommended that Georgia Power’s request not be approved either, “I stand by my vote to vote against their request in this case because I just didn’t think we had all the facts we needed to make a just decision,” Shaw said.
Shaw also indicated a concern and a recognition that man Georgia Power customers affected by the pandemic may still be struggling to get current on their electric bills. He says that’s why the PSC required Georgia Power to make sure installment plans are in place to prevent shutoffs.
Still, Eaton pointed out that three commissioners including himself, voted to acknowledge the tight spot that Georgia Power is finding itself in. Eaton said the Utility will likely have a huge drop in revenue in some areas because industries and commercial buildings have shut down. So, he says considering the higher expenses from COVID seem to make sense and seem to be only fair. “These are for direct virus costs and it’s going to be put into what’s called a deferred asset account,” he said.
Eaton says they means that expenses will be reviewed and it be up for discussion at the next rate case.
“Nobody would have possibly predicted this pandemic so my logic in voting for supporting their efforts here was like almost likening it to a hurricane. We do something similar to that with storm damage where we will put these storm expenses into a deferred assets accounts and review them later in a rate case,” he said.