Savannah Electric receives approval for new fuel cost recovery allowance due to high price of gas and coal

Following a national trend for electric utilities, Savannah Electric today received a decision on its fuel cost recovery (FCR) allowance request from the Georgia Public Service Commission (GPSC). The adjustment is needed to cover the dramatic increase in the market price of natural gas and coal used to generate electricity.

Under Georgia law, Savannah Electric is only allowed to recover fuel-related costs of generating electricity, as approved by the GPSC in a fuel case.

The new allowance is effective the first billing cycle in December and applies to all customer classes. Individual bills will vary based on usage and applicable rate plans, but a typical residential customer using 1200 kilowatt-hours (kwh) per month can expect to see an increase of approximately 13 percent or about $15 a month.

The last fuel allowance adjustment for Savannah Electric was approved over a year ago in October 2004. Since that time, already high fuel prices have soared to new levels. A deficit in the company’s fuel account grew from approximately $18 million last fall, to an expected $71 million by the end of November 2005. As an example of just how fast natural gas prices rose after the Gulf Coast hurricanes this summer, Savannah Electric’s fuel deficit worsened by some $24 million since this case was filed less than three months ago.

As a result, the rate approved today may not be enough to keep pace with the higher fuel costs expected in 2006. The decision requires Savannah Electric to file a new fuel case on or before Jan. 17, 2006 in order to address the situation using further updated information. That case would then take 90 days to resolve before rates could change again.

Savannah Electric currently offers a $14 Senior Citizen’s Low-Income Credit to eligible customers and a request for an additional credit was approved by the Commission. Enrolled customers 65 and older with an annual household income of $14,000 or less will automatically see another $6 applied as a fuel credit beginning in December. Customers may sign up by calling the company or by contacting various community groups working with senior citizens, such as Savannah’s Economic Opportunity Authority and Senior Citizens, Inc.

Other programs such as Budget Billing, a “time-of-use” fuel rate, Power Credit and home energy audits are also available.

Customers can help offset some of the effects of the higher fuel charge through improving efficiency. According to the government’s Energy Star program, implementing recommended efficiency measures can save up to 30 percent on energy bills. Even customers in highly efficient homes can save by changing energy usage habits. Tips for both cases appear on the attached page. In addition, efficiency information is often included in customer bill inserts and can be found at www.savannahelectric.com or by contacting the company at 1-800-437-3890.

Savannah Electric, a subsidiary of Southern Company, serves 145,000 customers in a five-county area of Southeast Georgia.

[Attachment] Energy Efficiency Advice from Savannah Electric

Invest for long-term energy efficiency:

• Look for the ENERGY STAR® label when purchasing or replacing appliances. You can lock in energy savings for years to come.

• Investigate the need to have attic ductwork sealed. Loose joints and ducts mean you may be heating or cooling your attic or crawlspaces.

• Consider adding insulation to your home. With older homes especially, you can benefit from adding high R-value insulation to the attic. Make sure new homes are built with high R-value insulation in floors and walls as well.

• Make sure doors and windows seal properly with weather-stripping or caulking

• Add storm doors to reduce heat exchange and when building, use at least double-pane, energy efficient windows

• Repair leaky hot water faucets

• Have a reputable company maintain your heating and cooling system

• Consider replacing large area incandescent lighting with high efficiency fluorescent fixtures. Replace other incandescent bulbs with long-lasting compact fluorescent bulbs

Simple habits and practices can save money too:

Winter practices:

• Clean or change your heating system’s air filter monthly

• Open drapes and blinds each day to let in the sun`s warmth. Close them after dark to hold in the heat.

• Use exhaust fans sparingly. Steam from cooking or bathing can add warmth and moisture to the home, improving comfort.

• Use ovens, dryers and dishwashers when the family is in living areas, such as early evening during the winter. The extra heat can help you use a lower thermostat setting.

• Run ceiling fans on low and reverse their direction to gently push warm air from the ceilings back to the floor.

• Make sure the fireplace flue is closed when not in use. A great deal of heat is lost up the chimney.

• Set your thermostat and leave it there, especially if you have an electric heat pump. This will minimize the amount of time that heat strips operate.

Summer practices:

• Clean or change your air conditioner’s air filter monthly

• Close blinds or drapes to help keep out the sun’s heat

• Use fans to move the air. This helps you feel cooler with a higher thermostat setting and fans use little energy compared to air conditioners.

• Run exhaust fans to remove steam from cooking or bathing areas, but only until steam is gone

• Use large steam-producing appliances like washers, dryers and dishwashers in the early morning or at night. You will stay more comfortable and your cooling system will not work as hard

• Keep “in and out” household traffic to a minimum if you use air conditioning

• Consider all the items you need from the refrigerator or freezer before opening the door

• Use task lighting when possible instead of full-room lighting to lower costs and reduce heat build-up

Finally, visit www.savannahelectric.com or call 1-800-437-3890 for a free energy check-up. It’s quick and easy. We`ll provide suggestions customized for your home. Or you can ask to schedule an in-home energy audit.