Atlanta Georgia Power Co. has agreed to lower prices for all its customers next year by $262 million - the largest rate reduction in Georgia Power history. The company accepted a settlement proposal offered by the Georgia Public Service Commission as a culmination to the companys rate case filed on June 4.
We believe this reduction in the price of our product provides great benefits to our existing customers, and it will stimulate economic expansion and investment in Georgia. There is no doubt these lower prices will help us attract new industry and business to Georgia, said Allen Franklin, Georgia Power president and chief executive officer. This reduction is possible because we have successfully managed our business while we have controlled our costs.
Georgia Power has not raised its base rates since 1991. Current rates, which are 16 percent below the national average, will drop to 23 percent below the national average under this agreement.
Under terms of the three-year agreement, a $262 million rate reduction will go into effect Jan. 1, 1999. An additional $24 million in rate reductions will begin Jan. 1, 2000. The company will be required to accelerate the depreciation of assets by $85 million each year. In addition, any earnings above the allowed 12.5 return on equity (ROE) will be allocated among further rate reductions, accelerated depreciation and the company. The total package of rate reductions and accelerated depreciation provides more than $1 billion in benefits to customers over the next three years.
The $262 million rate reduction will be shared among all of Georgia Powers 1.6 million residential customers, its 213,000 small business customers, and its 10,000 large manufacturing and industrial customers. Allocations will be distributed in the following manner: in 1999 a $145 million rate reduction will be allocated to small businesses, and the remaining $117 million of rate reductions will be evenly divided among residential, large business and outdoor lighting customers. In 2000 and 2001 the additional $24 million in rate reductions will be for small business customers. The average rate reduction for Georgia Power customers all three years will be 8.7 percent overall.