High price of gas & coal; $47 million fuel deficit force request for higher fuel cost recovery allowance starting this December

In what has become a national trend for electric utilities, Savannah Electric today filed a proposal with the Georgia Public Service Commission (GPSC) to raise its fuel cost recovery (FCR) allowance this December. The measure comes a little more than a year after its last such request and is needed to cover the dramatic increases in the market price of natural gas and coal used to generate electricity.

If approved, the new allowance will become effective the first billing cycle in December and applies to all customer classes. Individual bills will vary based on usage, but a typical residential customer using 1200 kilowatt-hours (kwh) per month can expect to see an average increase of approximately 13 percent.

Under Georgia law, electric utilities are allowed to recover fuel-related costs of generating electricity, as approved by the GPSC. The fuel allowance can only cover this approved cost and no more. Electric utilities are not allowed to profit from the FCR allowance.

Similar trends in world fuel markets forced a higher FCR allowance last year, but an $18 million fuel deficit only worsened due to further double-digit percentage increases in the market price of fuel. The company now has a fuel account deficit of more than $47 million. That deficit is expected to grow to $57 million by the time the case is resolved in late November.

The company significantly reduced the fuel allowance in 2002 after high fuel prices of 2000-2001 returned to more normal levels.

This filing includes a measure to encourage energy efficiency and mitigate the impact of the increase for customers in smaller residences who use less energy. Currently, all kilowatt-hours are billed using a fixed rate for fuel. With the new rate design, usage above 750 kwh will be billed at one rate, while the first 750 kwh are billed at a lower rate.

The company encourages the wise use of electricity by all customers. According to the government’s ENERGY STAR® program, implementing recommended energy efficiency measures can save up to 30 percent on energy bills. Even customers in highly efficient homes can save by changing energy usage habits. Tips for both cases appear on the page below. In addition, efficiency information is often included in customer bills and can be found at www.savannahelectric.com or by contacting the company at 1-800-437-3890.

Savannah Electric currently offers a Senior Citizen’s Low-Income Credit to eligible customers. Enrolled customers 65 and older with annual household income of $14,000 or less now receive a $14 credit each month. In this filing, the company is also proposing an additional $5 fuel credit for low-income seniors to help offset the effects of this proposed higher fuel allowance. If approved, this new credit will automatically be applied to any account receiving the standard senior credit. Customers may sign up by calling the company or by contacting various community groups working with senior citizens, such as Savannah’s Economic Opportunity Authority and Senior Citizens, Inc.

Other programs such as Budget Billing, a “time-of-use” fuel rate and Power Credit are also available.

Savannah Electric, a subsidiary of Southern Company, serves approximately 145,000 customers in five Southeast Georgia counties.


Energy Efficiency Advice from Savannah Electric

Invest for long-term energy efficiency:

• Look for the ENERGY STAR® label when purchasing or replacing appliances. You can lock in energy savings for years to come.

• Investigate the need to have attic ductwork sealed. Loose joints and ducts mean you may be heating or cooling your attic or crawlspaces.

• Consider adding insulation to your home. With older homes especially, you can benefit from adding high R-value insulation to the attic. Make sure new homes are built with high R-value insulation in floors and walls as well.

• Make sure doors and windows seal properly with weather-stripping or caulking

• Add storm doors to reduce heat exchange and when building, use at least double-pane, energy efficient windows

• Repair leaky hot water faucets

• Have a reputable company maintain your heating and cooling system

• Consider replacing large area incandescent lighting with high efficiency fluorescent fixtures. Replace other incandescent bulbs with long-lasting compact fluorescent bulbs

Simple habits and practices can save money too:

Summer practices:

• Clean or change your air conditioner’s air filter monthly

• Close blinds or drapes to help keep out the sun’s heat

• Use fans to move the air. This helps you feel cooler with a higher thermostat setting and fans use little energy compared to air conditioners.

• Run exhaust fans to remove steam from cooking or bathing areas, but only until steam is gone

• Use large steam-producing appliances like washers, dryers and dishwashers in the early morning or at night. You will stay more comfortable and your cooling system will not work as hard

• Keep “in and out” household traffic to a minimum if you use air conditioning

• Consider all the items you need from the refrigerator or freezer before opening the door

• Use task lighting when possible instead of full-room lighting to lower costs and reduce heat build-up

Winter practices:

• Clean or change your heating system’s air filter monthly

• Open drapes and blinds each day to let in the sun`s warmth. Close them after dark to hold in the heat.

• Use exhaust fans sparingly. Steam from cooking or bathing can add warmth and moisture to the home, improving comfort.

• Use ovens, dryers and dishwashers when the family is in living areas, such as early evening during the winter. The extra heat can help you use a lower thermostat setting.

• Run ceiling fans on low and reverse their direction to gently push warm air from the ceilings back to the floor.

• Make sure the fireplace flue is closed when not in use. A great deal of heat is lost up the chimney.

• Set your thermostat and leave it there, especially if you have an electric heat pump. This will minimize the amount of time that heat strips operate.

Finally, visit www.savannahelectric.com or call 1-800-437-3890 for a free energy check-up. It’s quick and easy. We`ll provide suggestions customized for your home. Or you can ask to schedule an in-home energy audit.