Savannah Electric has received permission from the Georgia Public Service Commission (GPSC) to lower the electric rates of its small business customers.
In a vote taken in Atlanta on June 10, 1998, the Commission unanimously approved a phased, four-year plan to lower rates by some $11 million. The first rate reduction will take effect with the July 1998 billing cycle and represents a $2 million cut on an annualized basis. In 1999 an additional $1 million reduction will be implemented, followed in 2000, by an additional $500,000 reduction. When fully implemented, small business customers would see on average an 8.6% reduction in the price paid for electricity.
The stipulated agreement reached with the Commission also includes the following provisions to further reduce the Companys earnings level:
- requires an additional $1.95 million in storm damage accrual over the 4 years;
- requires an additional $8 million in depreciation on generating assets over
the 4 years to provide for the mitigation of potentially strandable costs;
- requires a liability account be established and credited with 100% of the additional depreciation on generating assets (the Commission will determine the disposition of the amount accumulated in the liability account); and
- precludes Savannah Electric from asking for a rate increase except upon significant change in economic conditions, new laws, or regulations during the terms of this agreement and allows for quarterly monitoring of the Companys earnings performance.
The cuts will make small business rates more competitive. Other Savannah Electric customers already pay rates well below the national and regional averages.
Savannah Electric last raised base rates 13 years ago in 1985 and subsequently implemented rate reductions to all customer classes in 1988, 1990, 1991, and 1992.
Savannah Electric is a subsidiary of Southern Company. Southern Company (NYSE: SO) is the largest producer of electricity in the United States and is the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. Savannah Electric serves 125,000 customers in a five-county area of Southeast Georgia including Chatham, Effingham, Bulloch, Bryan, and Screven.