Lawyers representing environmental groups and manufacturers asked the state Public Service Commission’s (PSC) Energy Committee Thursday to reject an agreement letting Georgia Power recover 100% of higher fuel costs incurred during the last two years from customers.
The PSC’s Public Interest Advocacy staff and the Atlanta-based utility agreed last month on a plan that would allow Georgia Power to recover $2.1 billion in higher fuel costs primarily due to an increase in natural gas prices. That would raise the average residential customer’s bill by $15.90 a month.
The agreement’s opponents did not challenge Georgia Power’s right to recover the higher fuel costs, which is permitted under state law as a pass-through expense. The utility does not earn any profit from fuel-cost recovery.
Instead, they objected to letting Georgia Power collect the full cost recovery from customers at a time many are hard pressed to pay their electric bills without at least some sharing of the costs with shareholders.
Last year, nearly 10% of the utility’s residential customer accounts were disconnected for nonpayment, said Jennifer Whitfield, a lawyer representing Georgia Interfaith Power and Light.
She said state law requires the commission to approve electric rate hikes only if they are “just and reasonable.”
“There’s nothing just and reasonable about service people can’t afford,” Whitfield said.
Bryan Jacob, representing the Southern Alliance for Clean Energy and the Sierra Club, said not requiring Georgia Power to have some “skin in the game” leaves the utility with no motivation to control fuel costs.
“The decision-making party bears no risk for the decisions they’re making,” he said.
Jacob suggested assigning even a 3% to 5% share of the costs would be enough to ensure Georgia Power acts responsibly in deciding what mix of fuels to use in generating electricity.
Opponents also asked that Georgia Power be required to extend the fuel-cost recovery period from the 36 months stipulated in the agreement to 60 months to spread out the costs.
“It does have to be paid,” said Clay Jones, a lawyer representing the Georgia Association of Manufacturers. “[But] extending it another year or two years would be a benefit.”
But Steve Hewitson, a lawyer for Georgia Power, said extending the recovery period past 36 months would drive up interest costs, raising the overall expense. He also noted that Georgia Power reduced its cost-recovery proposal by about $1 billion in the agreement compared to the request the company filed in February, lowering the size of the rate increase by about 30%.
Preston Thomas, representing the commission’s Public Interest Advocacy staff, defended the proposed agreement from arguments that it fails the ‘just and reasonable’ test.
”‘Just and reasonable’ is balancing both customer and utility interests, not the lowest possible rate,” he said.
The commission is scheduled to vote on the fuel-costs recovery agreement next week.