State energy regulators Tuesday unanimously approved Georgia Power’s plan to freeze customer rates for the next three years.
Under an agreement the Atlanta-based utility and the Georgia Public Service Commission’s Public Interest Advocacy Staff reached in May, Georgia Power will not seek to raise base rates until 2028 at the earliest. However, the agreement excludes “reasonable and prudent” costs the utility has incurred from storm damage mostly from Hurricane Helene, a major sticking point with environmental groups that opposed the plan.
Before Tuesday’s 5-0 vote, Commissioner Tim Echols said Georgia’s economic successes of recent years are the result of sound energy planning.
“Our energy system has been the foundation of above-average economic growth in the state of Georgia,” Echols said. “That economic performance would not have been possible without the investment ratepayers made in our energy system.”
“The rate freeze resulting from this plan is a great result for customers, balancing the mutual benefits of extraordinary economic growth among all stakeholders and helping to ensure that we remain equipped to continue supporting growth in this state,” added Kim Greene, chairman, president and CEO of Georgia Power. “A plan like this is only possible due to the strength of Georgia’s constructive regulatory environment, and we thank the Georgia Public Service Commission for their vote today.”
But critics said the agreement represents a rate freeze in name only because it will let Georgia Power seek to recover storm damage costs from customers starting as early as next May.
Bob Sherrier, a lawyer with the Southern Environmental Law Center’s Atlanta office, accused the company of seeking to saddle customers with the costs of huge increases in electrical generating capacity to support the rapidly growing demands of power-hungry data centers springing up across the state.
“Everyday Georgians cannot be on the hook for Georgia Power’s data center spending spree,” he said. “The next three years are very consequential for the electric grid and deserve much more scrutiny than occurred here.”
A key point of contention in the agreement is the profits Georgia Power will be allowed to recover on its investments. The agreement sets that Return on Equity (ROE) at a maximum of 11.9%, a number Commissioner Lauren “Bubba” McDonald sought to trim to 11.5% Tuesday in a motion that died for lack of a second.
“With automatic rate increases in ’23, ’24, and ’25 … it is good for the ratepayers to have this frozen for the next three years,” McDonald said in explaining why he voted to support the rate freeze despite the defeat of his motion. “[But] if you show you made over $2.5 billion profit last year and then go above [the current maximum ROE] … it’s good to hold that for three more years.”
The agreement’s opponents also objected to the commission’s decision to freeze rates without the usual months-long process of hearings that would have let the public weigh in on the plan. The agreement with the PSC staff allows Georgia Power to avoid what was to have been a rate case that would have stretched over the last half of this year.
“Transparency and open dialogue are essential to building trust,” said Codi Norred, executive director of the nonprofit Georgia Interfaith Power and Light. “Many in our communities are worried about rising energy costs, and billpayers deserve to understand how these decisions are made.”
Tuesday’s vote set the stage for another decision confronting the PSC later this month. Commissioners are scheduled to vote July 15 on Georgia Power’s request for a huge increase in generating capacity primarily to serve “large-load” customers including data centers.
The utility plans to meet that growing demand by relying in part on fossil fuels, continuing to operate two of the company’s coal-burning power plants at Plant Bowen near Cartersville and Plant Scherer near Macon as well as upgrading existing natural gas units.
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