Savannah Electric receives decision on fuel cost filing

On Thursday, Savannah Electric received a decision from the Georgia Public Service Commission (GPSC) on the company`s request to increase its fuel cost recovery allowance. The adjustment is needed in order to cover the dramatic increases in the cost of natural gas used to generate electricity.

The GPSC approved the recommendation of its Advisory Staff, not the position of its Adversary Staff.

The company is currently evaluating this order. Importantly, the Commission found no evidence of imprudent actions by the company as had been charged by the Adversary Staff. Certain aspects of the company’s request were modified in this order, primarily regarding forecasts of future fuel costs and the amount of time over which the outstanding balance from prior fuel purchases can be recovered from customers.

Savannah Electric continues to evaluate the final order to determine if subsequent actions will be necessary.

Savannah Electric believes the presentation of its own proposed order was based on prudent actions and sound analysis and reflected a conservative approach to the short-term market conditions currently being experienced in the energy industry.

The new fuel cost allowance will be reflected beginning with customers’ May bills. The increase -- as approved -- applies to all customer classes, and will result in an approximate 15 - 18 percent increase in electric bills.

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.

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.

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. Over the past decade and a half, Savannah Electric customers have enjoyed very low rates. Savannah Electric rates were 16 percent below the national average before this increase.

A number of utilities across the nation are experiencing similar cost pressures and Savannah Electric is committed to remaining competitive when compared to other regions and companies.

The company encourages the wise use of electricity. Efficiency information is often included in customer bill inserts and can be found at 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.