Regulators approve plan for Georgia Power to freeze base rates through 2028

Rates could still go up next year when commissioners consider how customers will pay for $862 million in storm damage, mainly due to 2024's Hurricane Helene. In testimony, Georgia Power Chief Financial Officer Aaron Abramovitz said the company hopes any rate increase to repay the damage could be offset with a decrease in the charge customers have been paying since 2023 to make up for higher costs of buying natural gas and coal.

Customers have seen bills rise six times in recent years because of higher natural gas costs and construction projects, including two new nuclear reactors at Plant Vogtle near Augusta. A typical Georgia Power residential customer now pays more than $175 a month, including taxes.

The agreement allows Echols and Commissioner Fitz Johnson to seek reelection this year without a rate increase threatening their campaigns. Echols will face Democrat Alicia Johnson in November. Democrats Peter Hubbard and Keisha Sean Waites are vying in a July 15 runoff to face Fitz Johnson in the general election.

Georgia Power CEO Kim Greene called the rate freeze a “great result for customers, balancing the mutual benefits of extraordinary economic growth among all stakeholders and helping to ensure that we remain equipped to continue supporting growth in this state.”

Opponents said the deal didn't do enough to contain the high profits of Georgia Power, a unit of Atlanta-based Southern Co, and doesn't provide enough scrutiny of the company's operations. Commissioner Lauren McDonald on Tuesday unsuccessfully attempted to limit how much the company can earn on the money it has invested — called return on equity — to 11.5% instead of 11.9%. Return on equity is the key driver of the company's profits.

Georgia Power is the state’s only privately owned electrical utility, serving 2.3 million customers statewide. Last year, Georgia Power collected $11.3 billion in revenue and contributed $2.5 billion in profit to Southern Co.

The company predicts rapidly increasing demand from computer data centers. Georgia Power has said regular customers won't pay for power plants and transmission lines needed to electrify data centers, a pledge now backed by commission rules. But the company said in talks with commission staff that it could ask for a rate increase of up to $2.6 billion over three years. Instead, the company and staff hashed out a deal for the company to use tax credits and other financial maneuvers to boost its return on equity without raising rates.

Opponents noted that the company had promised “downward pressure” on rates last year when the commission approved an unusual request for Georgia Power to build more power plants outside the regular schedule. They asked why rates were staying flat instead of going down. John Wilson, an expert witness for the Southern Alliance for Clean Energy and other environmental groups, called it a “rate increase hidden in the shadows.”

Some advocates had called for Echols, McDonald and Commission Chair Jason Shaw to recuse themselves from the vote, saying they violated the commissioners’ quasi-judicial role by supporting the deal before hearing evidence. Shaw and Echols spoke in favor of the agreement and McDonald appeared at a news conference but didn't speak. All three commissioners declined to recuse themselves, saying they had done nothing wrong.

The deal comes even as commissioners are still considering Georgia Power’s three-year plan to generate enough electricity to meet the state's needs. That plan foresees a very large increase in electrical demand, requiring new power plants or new purchases from existing plants.

Typically, a rate plan is approved after the integrated resource plan, ensuring the utility can pay for improvements. Instead, Georgia Power will either absorb the costs or seek to pass them on to customers beginning in 2029.

Credit: AP

Credit: AP