Georgia Power Requests Rate Increase

Georgia Power today asked the Georgia Public Service Commission for permission to increase its base rates. If the request is approved, the average residential customer bill would increase by about 7 percent, or $5.25 per month. (Average residential use is about 1,000 kilowatt-hours per month.) The proposed change in rates would not be effective until January 1, 2005.

Georgia Power’s last base rate increase was approved in 1991.

Georgia Power is seeking the rate increase to recover higher operations and investment costs. These investments include power lines, new generation sources, environmental controls and other infrastructure necessary to meet growing customer demand for electricity.

Today, the average residential customer uses 16 percent more electricity than in 1991.

Georgia Power is serving 445,000 more customers than it was 13 years ago, when it received its last base rate increase.

To meet customer demands for electricity, Georgia Power has added nearly 5,000 megawatts in electric generation capacity and has invested more than $1 billion in new environmental controls since 1991.

While base rates have not increased since 1991, there have been changes in customers’ bills. In 1998 and 2001, the PSC decreased base rates. In fact, the company’s average retail rate in 2003 was about the same as it was in 1987.

While the company’s fuel cost recovery rate has gone up – and down – over the past decade, Georgia Power’s base rates have not increased since 1991. The fuel cost recovery rate reflects only the cost of fuel used to generate electricity, while base rates reflect all other costs. “Georgia Power employees have worked hard to keep rates below the national average, and our customer service ratings at the top of our industry,” said Mike Garrett, CEO of Georgia Power. “Since our last base increase in 1991, we have held operations and maintenance costs to levels slightly less than inflation. For example, we’re serving nearly half a million additional customers with fewer employees than we had in 1991. However, to maintain the reliable service our customers expect, we need a rate increase to cover our costs so we can continue to meet customers’ needs.”

Georgia Power will need to invest $5 billion over the next five years to keep up with customer needs and make investments in environmental controls. This $5 billion includes $1.3 billion for new generating capacity and investment in existing plants; $2.8 billion for power lines; and $1.3 billion for additional environmental controls.

Georgia Power’s rates rank approximately 20 percent below the national average and also compare favorably to rates of other utilities in Georgia. (See PSC rate surveys: