Concluding the fuel rate request begun in December 1998, Savannah Electric received approval from the Georgia Public Service Commission (GPSC) to raise the fuel allowance portion of its rates by slightly under two-tenths of a cent per kilowatt-hour ($0.00190 /kwh). The measure will become effective May 1, 1999.

Under the new fuel allowance, a typical residential customer paying approximately $82 per month will experience a 2.9 percent increase of $2.38 on their monthly bills. The increase applies to commercial and industrial customers as well.

Even after this fuel allowance increase, Savannah Electric’s prices will remain well below the national average and below what most pay in the Southeast.

Under Georgia law, electric utilities are permitted to recover through a Fuel Cost Recovery (FCR) Allowance only what has actually been spent for fuel or purchased power, with no profit or mark-up.

Yesterday`s decision will cover anticipated higher fuel costs in the months ahead plus pay down the balance of fuel expenses already incurred by the company to meet growing customer needs.

Higher customer demand has required the company to increase the operation of generating units with higher fuel costs. Purchased power costs have also risen due to electric load growth at other utilities. These factors led the company to request the new fuel rate.

In January 1999, the GPSC approved a portion of the company’s initial request, raising the fuel allowance 2 percent. This prevented the outstanding balance in the company’s fuel account from growing larger. In the ensuing months, the company and GPSC Staff explored ways to recover the existing balance while minimizing the impact on customers.

Before filing this request, the last increase in Savannah Electric’s Fuel Cost Recovery allowance took place in December 1992. The rate was reduced in the Summer of 1996.

Savannah Electric last raised base rates -- that portion of its prices covering investment in power plants, substations, wires, poles, equipment, and daily operating costs -- 14 years ago in 1985, and subsequently implemented base rate reductions to all customer classes in 1988, 1990, 1991, and 1992.

Savannah Electric is an investor-owned, tax-paying utility serving 125,000 customers in a five-county area of Southeast Georgia. Savannah Electric is a subsidiary of Southern Company. Southern Company (NYSE: SO), the largest producer of electricity in the United States, is the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric.