YARBROUGH COLUMN: What is fueling Georgia Power’s rate increases?

Published 5:17 pm Monday, May 22, 2023

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If you happen to be a Georgia Power Company customer, I have some good news and some bad news. Let’s get the bad news out of the way first. Your bill is going up $16 per month starting June 1. That’s on top of what you are already paying for your service. And the good news? It is not really a rate increase. The company is just passing along its fuel costs to you for the next three years. Feel better now?

The Georgia Public Service Commission, one of our state’s least known and most impactful elective bodies, approved the measure unanimously last week to pass along those fuel costs which amounts to an additional $6.6 billion for its 2.7 million customers over the next three years. This is less than six months after they had approved a roughly $4 per month actual/factual rate increase, which amounts to $1.8 billion.

By the way, the PSC has approved two additional 4.5 percent rate increases which will go into effect in 2024 and 2025, with the exact dollar amount still to be decided.

It seems that the $16 per month customers will be paying for higher fuel costs is due to the impact of the Russia-Ukraine war. Georgia Power says it has already amassed fuel costs of some $2.2 billion that customers will need to cough up, as well as another $4.5 billion in expected fuel expenses in the next two years.

The decision to pass along those costs were approved after a five-minute discussion. PSC commissioner Bubba McDonald said approving the $16 increase was “very painful for all of us.” (Probably not as painful for Bubba. He doesn’t live in an area served by Georgia Power.) The commissioner went on to say, “But it is a reality. We owe the bill and we’ve got to pay it.” I’m confused. I thought Georgia Power owed it. Why do we have to pay it?

That same question was raised by environmentalists, manufacturing interests and consumer advocates who spoke in opposition to the increase in what amounted to a futile spitting-in-the-wind exercise. The Public Service Commission and staff said, “Sorry, our hands are tied.” They claim they are legally bound to allow Georgia Power to collect “all reasonable fuel expenses” from its customers. At the risk of sounding like I fell off a turnip truck, $6 billion doesn’t sound quite so reasonable to me. It sounds like a whopping big number. I guess the adjective is in the eye of the beholder.

The PSC also has been overseeing the construction of Georgia Power’s two nuclear reactors at Plant Vogtle near Augusta. When approved in 2012, the third and fourth reactors were estimated to cost $14 billion, with the first electricity being generated in 2016. My calendar says we are nearing June 2023, and they aren’t up and running yet. And the $14 billion? It has ballooned to $32 billion. How has the PSC let it get to this point? Who is minding the store?

I am getting eye-glaze writing down all these numbers and you are probably getting eye-glaze from reading them but maybe, like me, you have heard little blowback from our intrepid public servants under the Gold Dome who make the laws that allow/force the Georgia Public Service Commission to lay off so much of Georgia Power’s expenses on its customers, including the $16 increase set to go into effect in June.

That may be because they don’t want to bite the hand that feeds them and, my goodness, does the company feed them well. I am a former member of the State Ethics Commission, which has some fancy name now, and after some digging around their obfuscated website, I discovered Georgia Power lobbyists hosted 116 meals during this past legislative session and spent thousands of dollars feeding legislators, their spouses, the committees that regulates them, three of the Public Service Commissioners and the Lt. Gov.’s office. No wonder our intrepid public servants are so quiet. Their tummies are full.

As a regulated utility, Georgia Power has a 10.5% guaranteed return on equity (ROE), one of the best in the nation, thanks to the Georgia Public Service Commission. PSC vice chairman Tim Echols says this unusually high return is deserved because of Georgia Power’s “superior service.” Really? I guess we will just have to take his word for it. Like the majority of the members of the PSC, he doesn’t live in Georgia Power’s service area, either.