Savannah Electric today received a decision from the Georgia Public Service Commission (GPSC) on the company’s request to increase its base rates and decrease its fuel rates.
The company is currently evaluating this order to determine if subsequent actions will be necessary. Savannah Electric believes the presentation of its request reflected a conservative approach to the market conditions currently being experienced in the energy industry.
Savannah Electric president and CEO, Anthony James stated, “We are very disappointed in the Commission’s decision. We are concerned that the outcome of the base case will cause adverse effects on our ability to continue providing the level of service our customers have come to expect. The fact is, costs have risen since our last base rate increase in the mid 1980s and the small increase granted falls far short of what we need to meet this area`s growing electrical demands."
The company was only granted partial recovery of the higher cost of new, environmentally friendly natural gas generation -- previously certified by the Commission as the best way to provide additional energy resources in the area. This issue was the primary reason for the base rate request.
The reduction in the fuel cost allowance was requested in order to reflect the lower cost of fuel over the past year as well as to share the expected lower fuel costs from the new, highly efficient generating unit beginning operation in June.
The combination of the two measures was already expected to result in a net reduction in the rates customers pay. The company has not had time to evaluate what impact the current order will have on customer bills.
The GPSC approved a $7.8 million base rate increase rather than the $24.4 million that was requested. They also approved a $44.3 million fuel cost allowance reduction. The company requested a $41.3 million fuel cost reduction.
Savannah Electric has lowered base rates to all customers four times since its last base rate case in 1985.
Savannah Electric, a subsidiary of Southern Company, serves over 132,000 customers in a five -county area of Southeast Georgia.