PSC Again Hikes Georgia Power Rates, Declines on Solar Tax
(APN) ATLANTA — The Georgia Public Service Commission (PSC) voted unanimously Tuesday, December 17, 2013, to approve a compromise agreement between Georgia Power and the PSC staff.
As previously reported by Atlanta Progressive News, Georgia Power’s original request was for a rate increase of 1.46 billion dollars. The original request also included a newly proposed “solar tax,” a special tax on customers who have solar panels; as well as an increase in the guaranteed profit to Georgia Power.
The PSC agreement cut the amount of the increase by 573 million dollars. Now, Georgia’s 2.4 million residential and business ratepayers will pay an increase of 873 million dollars over the next three years.
The rate increase is intended to help Georgia Power finance its insistence on holding on to increasingly costly and outdated coal plants in Georgia. The increase will allow Georgia Power to pay for cost increases associated with new environmental regulations adopted by the U.S. Environmental Protection Agency (EPA), which the coal plants do not comply with.
But instead of increasing Georgia Power’s guaranteed rate of return, or Return on Equity (ROE), to 11.5 percent, the agreement lowers the company’s ROE to 10.95 percent from its current 11.15 percent.
The agreement also withdraws the proposed, controversial Supplemental Power Services Tariff, or solar tax. This was Georgia Power’s most controversial plan to tax people who install solar panels on their homes and to charge them for the energy their solar panels generated.
A poll conducted by Public Policy Polling on behalf of the Sierra Club found that nearly seven in ten voters oppose Georgia Power’s rate increases.
“The poll shows that voters and customers overwhelmingly agree: we don’t want to pay to keep polluting and obsolete coal-fired power plants going,” Colleen Kiernan, Director of the Georgia Chapter of the Sierra Club, said in a statement. “Georgia Power customers know that there are cleaner, cheaper, safer sources of electricity, like wind and solar.”
The three-year rate plan starts on New Year’s Day, 2014. On January 01, 2014, Georgia Power customers’ average monthly residential rate will go up $2.19. On January 01, 2015, ratepayers will get hit with an additional rate increase of $3.61 per month. On January 01, 2016, ratepayers will again pay another increase of $2.96 per month. This is for a grand total of $8.76 per month, or approximately $105.12 a year, by 2016.
According to Georgia Watch, this is on top of Georgia Power increases since 2003 that have added over 44 dollars per month to household electric bills.
Just like the Nuclear Construction Cost Recovery or Nuclear Tax currently on Georgia Power ratepayers’ electric bills, ratepayers will now be paying in advance for costly upgrades to aging, obsolete, coal-fired power plants.
The rate increase also comes in the middle of a protracted recession that began with the economic meltdown caused by the Wall Street gambling spree in 2008. The unemployment rate in Georgia has come down from the 10.4 percent double-digit high in 2009 to 8.3 in September 2013, according to the Bureau of Labor Statistics. However, this is still higher than the pre-recession low of 4.8 in September 2007.
Other provisions contained in the settlement include increasing the monthly Senior Citizen Discount from 14 dollars to 18 dollars per month. To qualify for a Senior Citizen Discount, and to receive the $18 discount, a Georgia Power ratepayer must be 65 years or older with a total household income of not more than 14,355 dollars annually.
The settlement sets an Earnings Band of ten percent to twelve percent for Georgia Power. Any earnings above twelve percent will be shared two-thirds with customers and one-third by the Company.
Georgia Power will not be able to file a general rate case unless its earnings drop below ten percent.
The settlement also allows the Company to implement an electric service pre-pay program for eligible customers in the second quarter of 2014.
With a pre-paid plan, a customer must keep a 50 dollar minimum credit balance in their account, and pay as they go, in other words, in advance of their usage. Prepaid customers will not receive a traditional paper bill at the end of each month.
Greg Roberts, Georgia Power’s Vice President for Prices and Planning, testified in the first round of hearings–attended by Atlanta Progressive News–that the “Solar Tax” was to cover the infrastructure needed to generate and distribute electricity to those solar-panel owners at night and on cloudy days. Roberts said he was concerned that people who did not have solar panels were subsidizing the system for people with solar panels.
“Customers will never pay off their share of those costs, even after twenty years because the company is constantly making improvements,” Roberts said.
This is very similar language to what John Eick, the legislative analyst for the right-wing American Legislative Exchange Council (ALEC) energy and environment program, used in an interview with the Guardian newspaper in the United Kingdom.
Eick told the Guardian the group would be looking closely in the coming year at how individual homeowners with solar panels are compensated for feeding surplus electricity back into the grid.
“This is an issue we are going to be exploring,” Eick said. He said ALEC wanted to lower the rate electricity companies pay homeowners for direct power generation, and maybe even charge homeowners for feeding power into the grid.
“As it stands now, those direct generation customers are essentially free riders on the system. They are not paying for the infrastructure they are using. In effect, all the other non-direct generation customers are being penalized,” Eick said.
Over the coming year, ALEC will promote legislation in states across the U.S., with goals ranging from penalizing individual homeowners and weakening state clean energy regulations, to blocking the U.S. Environmental Protection Agency, the Guardian reported.
ALEC State Chairs in Georgia are State Rep. Josh S. Clark (R-Buford) and State Sen. Judson H. Hill (R-Marietta). For a complete list of Georgia politicians who are active ALEC members, and for model ALEC legislation, go to http://www.ALECexposed.org .