Savannah Electric files first base rate case in 16 years

Savannah Electric today initiated a Base Rate Case with the Georgia Public Service Commission (GPSC). The last time Savannah Electric filed a base rate case was in 1985 and the company has lowered base rates to all customers four times since.

This filing addresses a number of issues, chief among them being recovery of costs for 200 megawatts of new generating capacity to meet growing customer demand for electricity. Other costs that have increased since 1985 will also be addressed.

The additional generating capacity will come from a new, state-of-the-art power plant in west central Georgia that will begin operations in June 2002. Following exhaustive review, the GPSC previously certified this alternative as the best way to serve customers’ growing energy needs. Called “combined-cycle” generation, this power plant incorporates features and operating characteristics that greatly enhance its efficiency and environmental performance.

While this power plant’s efficiency will dramatically lower Savannah Electric’s fuel costs for years to come, the company is no longer able to absorb the increased non-fuel expenses required to serve more customers and higher electrical demands. Therefore, this filing will request a base rate increase for all customers.

In order to offset most, if not all, of the requested increase to base rates, Savannah Electric intends to file for a reduction in its Fuel Cost Recovery Allowance in April 2002 so that both would be implemented at the same time in June 2002.

The fuel cost reduction is possible due to the efficiency gains of the new generation and reductions in natural gas costs.

Since state codes establish a 45-day timeframe for fuel cost cases and a six-month duration for base rate cases, implementing both changes at the same time next year requires initiating the fuel case later than the base case. As such, the exact amount of any fuel cost reduction will not be known until spring 2002. Based on current estimates it is believed that the worst case for a typical residential customer using 1200 kwh a month would result in a bill increasing from $103 to about $107.

The company has also designed features into the case that can help reduce subsidies between customers. One such example is an updated fee schedule. This means that more of the costs for transactions such as returned checks, late payments and meter tampering, will be paid by the customers who cause those costs.

In addition, Savannah Electric is requesting new rate options that offer price incentives to customers who can shift some of their electrical usage from higher cost to lower cost hours of the day. The company has requested that this be made available for interested residential and small business customers for the first time.

Savannah Electric also asks for expanded eligibility for the low-income, senior citizen discount. If adopted, the number of customers qualifying for the basic facilities charge waiver is expected to rise by 50 percent.

The company will continue to emphasize energy efficiency and existing payment options like budget billing, eBill and electronic funds transfer.

Base Rate Cases typically have a six-month duration starting with the initial filing and including various hearings and testimony and concluding with a Commission vote in May 2002.

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.

Savannah Electric, a subsidiary of Southern Company, serves over 132,000 customers in Chatham, Effingham, Bryan, Bulloch and Screven counties of Southeast Georgia.