High cost of natural gas results in Savannah Electric fuel rate filing

Savannah Electric today expects to file a request with the Georgia Public Service Commission (GPSC) to raise its Fuel Cost Recovery (FCR) Allowance. The adjustment is needed in order to cover the dramatic increases in the cost of natural gas used to generate electricity.

Savannah Electric anticipates that the new allowance will be reflected beginning with the first billing cycle in May. The increase applies to all customer classes with residential customer bills expected to increase by approximately 25 percent.

The company uses more natural gas to generate electricity today than in the past due to environmental concerns, operating characteristics -- like quick-start capability -- and its historically low overall costs.

Savannah Electric also relies on coal-based generation and purchased power to meet consumer demands.

Under Georgia law, the cost and expense of fuel used to generate electricity is determined by the GPSC. The fuel allowance can only cover this cost and expense. Electric utilities are not allowed a mark-up or profit on the Fuel Cost Recovery Allowance.

Savannah Electric last raised its base rates -- that portion of its prices covering investment in power plants, substations, wires, poles, equipment, and daily operating costs -- 16 years ago in 1985. The company implemented base rate reductions to all customer classes in 1988, 1990, 1991, and 1992 and further cuts to small business customers in 1998, 1999 and 2000.

The company encourages the wise use of electricity. 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.

Other programs such as Budget Billing and a Senior Citizen’s Low-Income discount are also available to eligible customers.

Savannah Electric, a subsidiary of Southern Company, serves over 132,000 customers in a five-county area of Southeast Georgia.