Customers to be held accountable for 99.7% of Georgia Power's inaccurate fuel cost forecast, raising the typical residential customer's bill by almost $200/year
Atlanta, GA. – Today, May 16, the five-member Georgia Public Service Commission (PSC) approved an agreement by Georgia Power and the PSC’s Public Interest Advocacy (PIA) staff that will saddle ratepayers with reimbursing billions in under-budgeted costs from volatile fossil gas prices over the past two years, along with projected future costs for fuel sources in next two years.
Georgia Power officials amassed more than $2 billion of unrecovered fuel expenses over the last two years. In addition, the proposed rate hike includes another $4 billion in projected fuel costs for the next two years. These costs will be passed on to customers, resulting in an additional $16 per month on customers’ power bills.
Despite many customers who expressed concerns to the PSC that bearing the brunt of these rising fuel costs will make it harder for those who already cannot afford to pay their electric bills, the Commission approved the compromise agreement PIA Staff had reached, holding customers accountable for 99.7% of Georgia Power’s inaccurate forecast. The Commission failed to address the “moral hazard” that this current situation represents. In addition to raising the typical residential customer’s bill by almost $200/year, the Commissioners’ decision also leaves customers vulnerable to this same sort of fuel cost increase in the future.
Bryan Jacob, Solar Program Director with Southern Alliance for Clean Energy (SACE), said on behalf of SACE and the Sierra Club, “We are deeply disappointed in how this process played out. The decision was pre-ordained. The whole thing was a charade.
“PIA Staff negotiated a compromise with Georgia Power before even looking at the testimony from other parties – including SACE and Sierra Club. Then, at the beginning of the hearing, we were subjected to a “civics lesson” where an attorney for the Commission essentially implied that the statute doesn’t empower the Commission to do anything that might protect customers from fuel price volatility – again, even before listening to the testimony.
“I am very proud of the case our witnesses put forward. They made practical recommendations that could incentivize Georgia Power to keep fuel costs as low as possible, which would benefit both their customers and their shareholders. We supplied a draft order that would phase-in a fuel cost-sharing mechanism over the next three years so that the utility would have some “skin in the game” (starting at 3%, scaling to 5% by 2026).
“The fact that the Commission increased the discount for low-income senior citizens is not enough. The Commission should have acted within their authority to make future bills more affordable for all customers.”
Today’s approved bill increase is separate from the three rate increases Georgia Power received approval for in 2022, one of which already raised bills at the beginning of 2023 with rates set to increase twice again in 2024 and 2025. There will also be a separate increase when Vogtle Unit 3 comes online later this year, and yet another when Unit 4 comes online next year.
Since 1985, the Southern Alliance for Clean Energy has worked to promote responsible and equitable energy choices to ensure clean, safe and healthy communities throughout the Southeast. Learn more at www.cleanenergy.org.
About the Sierra Club
Sierra Club is a national nonprofit organization dedicated to exploring, enjoying, and protecting the wild places of the earth; to practicing and promoting the responsible use of the earth’s ecosystems and resources; to educating and enlisting humanity to protect and restore the quality of the natural and human environment; and to using all lawful means to carry out these objectives. Learn more at www.sierraclub.org.