SAVANNAH, Ga. (WSAV) – You will be paying more for electricity beginning in 2020, but not as much as you might have if the Public Service Commission (PSC) had granted the full rate hike request from Georgia Power.
Tuesday, the PSC approved most of the increase but said that Georgia Power could only collect half of the increase it was proposing in the monthly basic service fee.
“They were asking for $7.95 (over 3 years) and we’re giving them $4.00 (over 2 years) so it is right at half the request,” said PSC Commissioner Tim Echols.
Echols proposed a motion to the PSC in which the monthly fee was cut in half and can be collected in increments of $2 per year, starting in 2021. He told News 3 in part, the motion came from meeting with consumers in Savannah and other places around the state.
“I do a lot of town halls and visiting around the state and that (fee) was one of the biggest complaints that people had,” Echols said. “So I felt like this is a way that I can listen to my constituents and still give the power company the money they need to operate but do it in a way that my constituents feel like is a fairer way to do it.”
According to a news release from the Public Service Commission, Georgia Power will still collect $1.77 billion of the proposed $2.2 billion increase from 2020 through 2022. The release said this includes franchise fees.
Georgia Power told News 3 that an average household using 1,000 kilowatt hours per month of electricity can expect to see their monthly bill rise by about $5.89 per month. The company told the PSC this represents a first year total rate impact of 4 to 4.5% — with a second year impact of an additional 2 to 2.5% coming in 2021, and third year impact of a 4.5 to 5% in 2022.
John Kraft from Georgia Power told us the increase is needed to ensure “reliability and resiliency of the state’s electrical system as well as to comply with environmental programs per state and federal regulations.”
He also said the company must reinvest up to $450 million in the storm restoration fund which has been depleted because of numerous storms and three hurricanes in three years. He says their last rate case was in 2013.
In terms of the PSC’s action, Echols said lowering that monthly fee which all customers pay just to have service was a “good compromise.”
Consumer and energy advocates say the PSC’s decision isn’t that much of a favor to customers.
“Consumers did not win,” said Kurt Ebersbach from the Southern Environmental Law Center. ” I mean they won versus the original proposal but at the end of the day customers bills will go up.”
Ebersbach says while the monthly fee is not set to increase until 2021 it still sends a message to customers that “Georgia Power can collect more money before customers even use electricity.”
“The decision from the PSC is still better than what the company proposed but what you still have is customers having a greater share of their bill not being able to be managed through conserving their energy usage,” he said.
He also said the PSC is still allowing the company’s rate of return to be higher than even its own staff recommended.
“So what this Commission has now done is increase how much profit a utility can earn without any obligation to share it with rate payers and that’s not good for customers,” said Ebersbach.
The Southern Alliance for Clean Energy (SACE) called the higher monthly fee a “terrible precedent for potential similar increases in the future.”
SACE also said “even this $4 increase on residential customers is unjustified, based on faulty calculations, and much larger than most other fee hikes approved by utility commissions around the nation.”
“Today’s decision subordinated interests of residential customers and small businesses to those of big business. Customers who use the least amount of energy will lose even more control of their energy bills with this unjustified fee hike. Instead, customers will see higher bills and will be further disincentivized to reduce energy usage or invest in renewable energy,” said Bryan Jacob of SACE.
PSC’s Echols says Georgia Power must be allowed to collect enough revenue to operate. “Georgia Power can’t run the company on 2013 money.”
Kraft told us “the company has worked hard to manage costs and rates and this is our first rate case since 2013.”
He also says on an inflation adjusted basis that bills are about the same as the 1990’s. He says some customers are paying only about one dollar more month than they were paying in 2011.