In the 2022 rate case, the Georgia PSC will determine what are "fair and reasonable" rates and charges Georgia Power can collect from its ~2.7 million customers over the next three years.
Guest Blog | November 8, 2022 | Georgia, UtilitiesThis guest blog was written by Will Collier, Project Manager, Advocacy (GA) at the Southface Institute, and originally published on November 7, 2022, on Southface.org. It is reposted here with permission. Read the original article in full here.
The 2022 Rate Case: Georgia Power’s $2.9 Billion Ask
What are “fair and reasonable” rates and charges for Georgia Power to collect from its ~2.7 million customers over the next three years? That is the question the Georgia Public Service Commission (PSC) is charged with answering in the 2022 rate case for the state’s largest electric utility. The PSC’s decision has far-reaching impacts on Georgians, especially those with fewer financial resources, and on the environment—and fortunately, this decision is not made in a vacuum. Anyone can submit comments, and equipping yourself with an understanding of the process and issues can help.
The Public Service Commission’s decision takes time and testimony.
Every three years, Georgia Power updates its Integrated Resource Plan (IRP), determining the mix of energy resources and infrastructure that the utility will need over the next two decades. Southface Institute and the Southern Alliance for Clean Energy (SACE) jointly intervened in the 2022 IRP process, advocating to increase low-cost clean energy resources. The PSC approved the plan in July with some notable gains for energy efficiency.
Now, in the rate case, the PSC will look at the investments in the IRP alongside capital and other expenditures to decide who will pay what and when. The PSC must accept public input; they held the first hearing for Georgia Power’s direct testimony at the end of September, with Commissioners and intervenors cross-examining Georgia Power’s request. On October 20, more than 20 intervenors filed their own testimonies in response, including Southface and SACE.
Our testimony will be heard and subject to cross-examination at the second hearing of Georgia Power’s rate case, which takes place November 8-10. More filings are expected throughout the month before a final hearing that will take place November 29-30. After the different parties file briefs in early December, the PSC will hear them out on December 15 and render a final decision five days later.
If you think the rate case is an elaborate process, you’re not alone. But it’s so involved because it’s so important, impacting the utility bills of millions of Georgians as well as our state’s ability to be a regional and national leader in affordable, reliable clean energy.
If Georgia Power needs the money, we need the details.
Georgia Power is requesting to increase rates over the next three years. Because their rate cases were filed annually prior to 1995 (and because many states still go through the ratemaking process each year), the three-year plan is sometimes referred to as an alternate rate plan (ARP).
While some have reported that Georgia Power is only proposing a rate increase of about $1 billion, it’s not the full story. Their plan asks for an increase of $889 million in 2023, an additional $107 million in 2024, and another $46 million on top of that in 2025. Adding up the increases shown on the chart below, that tacks $2.9 billion onto ratepayers’ cumulative “bill” over the course of three years on top of what Georgia Power’s customers would be paying if the rate from 2022 remained the same.
Paying another $2.9 billion is a lot, even with Georgia Power’s customer base splitting the bill ~2.7 million ways. At the same time, the company is proposing to increase how much profit they are allowed to earn each year, arguing that it’s necessary to maintain good credit ratings.
With a few additional increases to customers’ bills that are likely to be approved in the next three years, commission staff estimate that the average Georgia Power customer will be paying $55-60 more per month for electricity in 2025 compared to what they paid in 2022. This increase is especially daunting for low- and moderate-income households—many of which Georgia Power serves today.
While some rate increases may be warranted, many intervenors are calling for more details in order to assess Georgia Power’s need for the amount they’re requesting.
The landscape is changing fast. The Commission can help Georgia keep pace.
One of the biggest challenges that the PSC and Georgia Power face in determining what to charge customers is how quickly other sources of funding are changing now compared to years past. In the few short months since the 2022 IRP was filed, the Inflation Reduction Act (IRA) passed. As the largest investment in climate action in US history, the economic assumptions that are used for ratemaking decisions have fundamentally changed.
With a historic amount of federal funding, programs, and incentives becoming available, Southface and SACE’s primary recommendation to Georgia Power and the PSC is to file adjusted revenue requests annually rather than making financial decisions that will last through 2025 based on early, incomplete information. Ideally, this would happen before the end of 2023, potentially with some refunds issued to customers. Requests would then be updated in 2024 and 2025. Making annual adjustments a requirement would lower the risk of collecting more than is needed from customers, and it would simply codify many of the actions that Georgia Power is already taking to track and report on IRA incentives.
For example, the IRA allows tax credits for energy storage for the first time in 2023. Georgia Power is planning to build two huge battery storage facilities, and this provision will reduce the cost of those facilities by 30% or more, depending on applicable “bonuses.” If Georgia Power can spend less, they can charge less, making it easier for customers to afford the electricity they need to stay healthy, comfortable, and productive. Fewer unpaid bills and cutoffs are good for Georgia Power too.
We are confident the PSC can incentivize Georgia Power to move quickly to identify funds that help alleviate the burden on ratepayers. When the Trump administration passed the Tax Cuts and Jobs Acts in 2017, they identified savings within a few months. We hope to see the same timely response to IRA opportunities, and we are recommending that Georgia Power work with commissioners to create an IRA tracker and commit to acting on annual reports of programs implemented and savings identified.
We encourage you to stay tuned and engaged.
Intervenors, like Southface and SACE, have expertise in utility regulatory planning and clean energy issues that make their input in Georgia Power’s rate case valuable. If you have expertise in being a Georgian who pays their energy bills, your input is valuable too.
Follow these guidelines to provide in-person public comments before the PSC or provide comments online, referencing Docket 44280. All hearings for the 2022 rate case can be watched live (or as recordings) on the commission’s YouTube channel.
Subscribe to the Southface newsletter for more insights and opportunities to get involved as the proceedings unfold. Together, we’ll build a healthier, more resilient future for our communities and our planet.
Key Dates in the 2022 Georgia Power Rate Case
- June 29: Georgia Power files direct testimony
- September 27-29: Hearing #1: Georgia Power’s testimony
- October 20: Intervenors file direct testimony
- Nov 8-10: Hearing #2: Intervenors’ testimony
- Nov 18: Georgia Power may file rebuttal testimony, and other parties may file direct testimony on distributed solar
- Nov 29-30: Hearing #3: Georgia Power’s rebuttal testimony and distributed solar testimony from other parties
- Dec 8: All parties may file briefs
- Dec 15: Energy Committee: parties may make final remarks
- Dec 20: PSC renders final decision