Georgia Power customers are paying significantly more for electricity today than they were just two and a half years ago, the result of six Public Service Commission-approved rate increases.
This summer, the utility was supposed to ask the PSC to adjust its rates again — possibly by raising them. But in May, Georgia Power announced a deal struck with the PSC’s public interest staff to keep its current base rates in place through 2028. Other manufacturing and utility groups have since endorsed the deal, too.
As the company plans a massive build-out of infrastructure to serve the state’s data center influx, Georgia Power says “freezing” rates now is in customers’ best interest. The PSC staff’s experts agree.
But environmental and consumer protection groups say the agreement, known as a “stipulation,” may not be as good for customers in the long run as it seems.
The commission held its only planned hearing on the agreement Thursday, before the PSC’s five members vote to approve or adjust the deal early next week.
‘A good, safe bet’
Since late 2022, a series of six rate hikes approved by the PSC has pushed the average Georgia Power residential customer’s monthly bill up by about $43, according to data from the company.
Georgia Power Chief Financial Officer Aaron Abramovitz testified the company’s costs to provide service have continued to rise, driven by higher interest rates, inflation and the investments it’s making in new power plants and transmission. And if the utility had filed a “rate case” this summer as originally planned, it would have likely included a request to raise rates again, he said.
Keeping current base rates in place for three more years will benefit the company and ratepayers, Abramovitz said. He argued the deal balances “mitigating increasing cost to serve customers with maintaining the reliable service and affordable rates our customers deserve and expect.”
“We think this is a good, safe bet for ratepayers to keep rates where they are for the next three years,” said Tom Bond, the PSC’s director of utilities.
Credit: Jenni Girtman
Credit: Jenni Girtman
Still, there are other costs out there the company will seek to pass along to customers soon. Those could lead to higher bills.
The company is slated to file a request in February to pass along to customers the cost of fuel it has used at power plants.
As part of the agreement, Georgia Power will also ask next year to collect outstanding storm expenses. Abramovitz testified Thursday that as of March, Georgia Power’s unrecovered damages sat at around $860 million. Almost all of it was caused by Hurricane Helene last September, which the company has called the most destructive storm in its history.
There’s a chance the storm balance could grow before the tab gets submitted to the PSC and on to customers. Forecasters predict the current hurricane season, which began June 1 and runs through the end of November, could once again produce more storms than normal.
Abramovitz testified that based on the company’s current forecast, the fuel and storm costs may not actually push bills up. In fact, he said customers could actually see their rates reduced. But Abramovitz left some wiggle room and did not specify which classes of customers — residential, industrial or others — the projections applied to.
Fight over ‘downward pressure’
Critics’ problems with the deal aren’t with keeping rates steady.
Their issues focus on the lack of information they say the company has shared about the impacts the enormous power fleet and grid expansion it’s planning will have on other ratepayers.
Those opponents say having a rate case as scheduled this year could allow for an examination of the company’s books and the financial impacts on all customer classes. Without it, they warned, the next chance may not come until 2028.
According to the most recent annual report from its parent, the utility giant Southern Company, Georgia Power has an estimated $34 billion in capital expenditures slated through 2029. The massive buildout it’s planning — including new oil and gas plants, batteries and other resources — is overwhelmingly driven by the need to serve data centers and other “large load” customers.
Earlier this year, the PSC approved changes to Georgia Power’s billing rules that allow the utility to charge data centers for additional costs needed to serve them. The commission and the company say the changes protect residential customers from being saddled with data center costs, but critics say they don’t guarantee it.
John D. Wilson, who testified Thursday as an expert witness for the Sierra Club, the Natural Resources Defense Council and the Southern Alliance for Clean Energy, said he did not believe the PSC has the information it needs to understand the impacts of the rate deal on other customers.
“While this stipulated agreement on its face means unchanged base rates today, you will also be approving — with scant review — all of these costs that are placing upward pressure on rates, both today and in the future," Wilson said.
Groups also questioned the company about whether data center-driven investments have put “downward pressure” on rates as it had promised.
Last year, in a separate case where Georgia Power asked the PSC to approve new gas plants, battery storage systems and more to serve data centers, the company estimated its investments would save customers $2.89 on their monthly bills.
But since then, Wilson and others argued the company has presented no evidence of the purported “downward pressure.”
“The commission last year ordered Georgia Power to reduce costs for residential customers by $2.89, but now that has evaporated without any proof,” said Bob Sherrier, an attorney at the Southern Environmental Law Center.
Abramovitz, Georgia Power’s CFO, said the company has complied with the commission’s order, but did not provide concrete evidence during the hearing.
Recusal controversy
Thursday’s meeting began with a ruling on a complaint four consumer advocacy and environmental organizations filed demanding three of the commission’s five members recuse themselves from the proceedings.
The controversy stemmed from recent remarks PSC Chairman Jason Shaw and Vice Chairman Tim Echols made in support of the proposed rate “freeze.” The groups argued the remarks — made before formal hearings on the deal — demonstrated bias and prejudgment in violation of state rules.
The complaint demanded Shaw, Echols and Commissioner Lauren “Bubba” McDonald each recuse themselves from the upcoming rate vote. McDonald had not spoken publicly in favor of the deal, but did appear at a May news conference alongside Shaw and Gov. Brian Kemp about the proposed rate “freeze.”
Credit: arvin.temkar@ajc.com
Credit: arvin.temkar@ajc.com
On Thursday, PSC staff told the commissioners they could voluntarily recuse themselves, but advised their actions did not require recusal. Each of the three said they would not forfeit their votes.
“I do not think my comments were grounds for recusal, so I will not be recusing myself,” Shaw said Thursday.
Patty Durand, a former Democratic PSC candidate who recently founded one of the groups behind the complaint — Georgians for Affordable Energy — called the commissioners’ refusal to step aside “beyond preposterous.”
“It renders the commission’s rules utterly meaningless and calls into question the integrity of the entire process and demands immediate accountability,” Durand said.
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