ATLANTA – A parade of expert and citizen witnesses asked the Georgia Public Service Commission (PSC) this week not to let Georgia Power recover 100% of higher fuel costs incurred during the last couple of years from customers.
While the witnesses blamed the increased costs on the Atlanta-based utility’s overreliance on natural gas, a witness for Georgia Power cited factors beyond the company’s control as driving up the costs of the fuel it uses to generate electricity.
Tuesday’s daylong hearing was on a request by Georgia Power to increase the average residential customer’s monthly bill by $15.90 to allow the utility to recover $2.2 billion in higher fuel costs. That’s down from the $23 monthly hike the company originally sought, thanks to an agreement Georgia Power reached last month with PSC staff.
Citizen witnesses complained that Georgia Power is too dependent on natural gas, which has a track record of huge price swings, and isn’t being aggressive enough in pursuing alternatives include wind and solar energy.
“The sun is free,” said Wanda Mosley, an Atlanta-area voting rights activist. “We get a whole lot of sun.”
A significant portion of Tuesday’s discussion centered on how much authority the commission has over fuel costs. Commissioner Lauren “Bubba” McDonald said state law requires the PSC to grant the increase.
“Our staff has looked at this fuel case. Everything is in order,” he said. “We have the responsibility of making the proper adjustments that are necessary under the law.”
But Jeremy Kalin, a clean energy finance attorney and advisor, said the law does not require the PSC to let Georgia Power recover all of its higher fuel costs from customers. Without at least some skin in the game on the part of Georgia Power and its shareholders, the company has no incentive to manage fuel costs prudently, he said.
Kalin said the law does not require the commission to sit on the sidelines and simply act as a pass-through for Georgia Power’s higher costs.
“I believe the commission does have an obligation under the law to conduct greater scrutiny on whether Georgia Power has been sufficiently prudent in mitigating … increases in natural gas reliance and natural gas costs,” said Kalin, who testified on behalf of the Georgia chapter of the Sierra Club and the Southern Alliance for Clean Energy.
Sarah Adams, Georgia Power’s vice president and comptroller, said the agreement between the utility and commission staff represents a significant improvement for customers over the company’s original request.
The agreement not only reduced Georgia Power’s initial request by more $1 billion, Adams said. The company also agreed to increase its senior citizen discount from $6 to $8, bringing it to $32 per month, and extended the recovery period from two years to three, she said.
Adams attributed the higher fuel costs to a combination of geopolitical unrest, supply chain constraints, higher than expected domestic demand for natural gas, and an increase in U.S. exports of liquefied natural gas, all outside of Georgia Power’s control.
The commission is scheduled to vote on the proposed increase May 16.