ATLANTA - Georgia Power today asked the Georgia Public Service Commission (PSC) for permission to increase its base rates to recover costs for environmental programs, new generation and electric infrastructure to meet growing customer demand for electricity.   If the request is approved, the average residential customer bill would increase by about 7.06 percent, or $6.67 per month. The average residential customer uses about 1,000 kilowatt-hours per month.  The proposed change in rates would not be effective until January 1, 2008.   

Georgia Power’s last base rate increase went into effect Jan. 1, 2005. 

“We are complying with the new federal and state environmental rules that require us to further reduce our emissions,” said Mike Garrett, President and CEO of Georgia Power. “These rules will require significant investments and we are asking the PSC to allow us to recover these costs.   We’re also working to ensure we have the electric infrastructure in place to maintain a reliable electric system for our customers as our state grows.”

In order to meet federal and state standards for nitrogen oxide, sulfur dioxide, mercury and particulate matter emissions, Georgia Power anticipates investing $2.7 billion between 2007 and 2011. By 2015, the company anticipates reducing NOx emissions by 85 percent and SO2 emissions by 95 percent from 1990 levels and achieving significant reductions in mercury and particulate matter emissions.

In addition to environmental controls, the proposed increase will also address infrastructure needed to keep up with increasing customer demand for electricity. Today, the average residential customer uses 15 percent more electricity than it did just 10 years ago. Georgia Power is serving 127,000 more customers than it was just three years ago. 

To meet customer demands for electricity, Georgia Power has added nearly 5,000 megawatts in electric generation and certified purchase power capacity since 1991. The company has also invested more than $1.3 billion in new power lines and substations since 2003. 

In total, Georgia Power will need to invest $5.5 billion over the next three years to keep up with customer needs and environmental controls.  This $5.5 billion includes $1.6 billion for new generating capacity and investment in existing plants; $2.1 billion for power lines, new metering equipment and substations; $1.3 billion for additional environmental controls; and $500 million for nuclear fuel and other capital improvements.

In addition to a traditional one-year rate filing, the company provided an optional three-year plan.  This plan provides for the same increase in 2008, as well as increases of 2.9 percent, or $2.93 per month, in 2009, and 0.66 percent, or 69 cents per month, in 2010 for the average residential customer.  The increases in 2009 and 2010 would recover the additional environmental costs in those years.  

For customers in the Savannah area, the Merger Transition Adjustment that was put in place last year is scheduled to expire on Dec. 31, 2007. Savannah customers will be merged onto Georgia Power rates effective Jan. 1, 2008.  The PSC’s decision on Georgia Power's rate case will determine the rates for Savannah customers in the future.

Georgia Power’s base rates remain at approximately the same level as 1991 when adjusted for inflation. This is possible because the PSC decreased base rates in 1998 and 2001.

Georgia Power’s rates rank approximately 17 percent below the national average and also continue to compare favorably to rates of other utilities in Georgia.  (See PSC rate surveys:  http://www.psc.state.ga.us/electric/surveys/residentialrs.asp) Even with this proposed increase, Georgia Power’s rates should remain well below the national average.

Georgia Power is the largest subsidiary of Southern Company, one of the nation’s largest generators of electricity.  The company is an investor-owned, tax-paying utility that serves 2.3 million customers and has operations in all but four of Georgia’s 159 counties.
 

Note:  Georgia Power, like other electric utilities in Georgia, has had a summer base rate and winter base rate for several years.  The summer rate is effective June 1 each year because it costs more to generate electricity in the summer because of increased demand – primarily from air conditioners. Winter rates become effective Oct. 1.

Cautionary Notice Regarding Forward-Looking Statements

This press release includes forward-looking statements regarding Georgia Power’s projected capital expenditures for a five-year period ending in 2011, reliability, emission reductions, and Georgia Power’s filing with the PSC to increase retail base rates.  There are various factors that could cause actual results to differ materially from those suggested by the forward-looking statements; accordingly, there can be no assurance that such indicated results will be realized.  These factors include:  the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, and also changes in environmental, tax, and other laws to which Georgia Power is subject, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings or inquiries, including the pending Environmental Protection Agency civil action against Georgia Power and Federal Energy Regulatory Commission matters; the effects, extent and timing of the entry of additional competition in the markets in which Georgia Power operates; variations in the demand for electricity, including those related to weather, the general economy and population, and business growth (and declines); available sources and costs of fuel; ability to control costs; investment performance of Georgia Power’s employee benefit plans; advances in technology; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate cases relating to fuel cost recovery; internal restructuring or other restructuring options that may be pursued; potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Georgia Power; the ability of counterparties of Georgia Power to make payments as and when due; the ability to obtain new short- and long-term contracts with neighboring utilities; the direct or indirect effect on the business of Georgia Power resulting from terrorist incidents and the threat of terrorist incidents; interest rate fluctuations and financial market conditions and the results of financing efforts and Georgia Power’s credit ratings; the ability of Georgia Power to obtain additional generating capacity at competitive prices; catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, pandemic health events, such as an avian influenza, or other similar circumstances; the direct or indirect effects on Georgia Power’s business resulting from incidents similar to the August 2003 power outage in the Northeast; the effect of accounting pronouncements issued periodically by standard setting bodies; and other factors discussed in reports filed by Georgia Power from time to time with the Securities and Exchange Commission.  Georgia Power expressly disclaims any obligation to update these forward looking statements.