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Dear <<First Name>>,

The dust has settled and it’s time to debrief what happened in Ga Power’s rate increase proceeding this past Tuesday (12/20/22) and how it impacts you. I will focus on 3 parts:

• Part 1 will focus on earnings and bills.

• Part 2 will focus on climate change and solar energy.

• Part 3 will focus on transparency and ethics.

In Georgia, rate cases are filed every 3 years. There will not be another one until 2025 which makes the stakes very high for all parties.

Part 1 - your electric bill and earnings

Elected officials at the Georgia Public Service Commission approved a $1.8 billion Georgia Power increase in revenue collections on Tuesday, raising your electric bills 12% over three years.

In January the average bill will increase about 2.5% per month, in 2024 it will increase about 4.5% per month and in 2025 it will increase again about 4.5% per month for a total of 12% per month increase, or $16/mo. for the average customer (more if your bills are bigger than $128/mo.).

The lower 2023 bill increase relative to 2024 and 2025 is to acknowledge five (5!) additional rate increases coming in 2023 unrelated to this rate case. They are:

• $2 billion in uncollected natural fuel surcharges, raising bills $5-20/mo. depending on the length of the recovery period

• Plant Vogtle Unit 3 nuclear reactor completion, raising bills $5/mo.

• Plant Vogtle Unit 4 nuclear reactor completion, raising bills $15/mo.

Two other rate increases will also happen in 2023 but I have no info on how much: additional collections for coal ash cleanup, and additional billions for Plant Vogtle’s cost overruns.

All in, you can expect your electric bill to increase about $40-50/month by the end of 2023.

Georgia Power’s heavy reliance on natural gas is coming back to bite us, at a time when so many people are already struggling to make ends meet. Ga Power makes money and continues to earn record profits, though, so commissioners see no problem. Let’s look at that next.

Remember, Ga Power is a monopoly. That means they don’t have competition and elected commissioners set electric prices and profits. And oh boy, are they generous:

Return on Equity:

Elected commissioners allowed Ga Power to continue to earn a Return on Equity of 10.5%, first set in 2019 and far higher than the 9.5% other state commissions allow. Public Interest Advocacy staff fought to return it to a reasonable 9.5% as other utilities earn, but lost. That 1% difference delivers $200 million in excess revenues to Ga Power annually. Watch as one commissioner tries to get his colleagues to set a lower ROE of “only” 10% but fails.

Capital structure

Elected commissioners allowed Ga Power to continue a capital structure far richer in profits than other utilities: Ga Power has a 56% debt to 44% equity compared to the U.S. utility structure of 51% debt to 49% equity. This rich ratio was also first set in 2019 and was also fought against by PIA staff, but lost.

That 4% difference delivers $300 million in excess profits for Ga Power annually. Watch as one commissioner tries to get his colleagues to set a lower capital structure for years 2024 and 2025 when Ga Power’s cash flow will be very rich from Plant Vogtle but fails.

And two commissioners (Echols and Johnson) are up for election in 2023. Wow - they surprised me in their disregard for consumers’ bills in favor of rich profits for Ga Power. They are the two on the far left in this video.

Earnings Band

But wait - there’s one more profit measure the elected officials gave Ga. Power above what “normal” utilities get called an earnings band. An earnings band is a ‘float’ for profits above or below the ROE which Ga Power can keep or lose. (Ga Power never loses). These commissioners gave Ga Power an UNHEARD OF float that allows Ga Power to keep everything up to 11.9%, not merely the already generous 10.5%. As a result Ga Power gets $200 million extra profits annually.

With these three measures Ga Power gets to keep about $750 million (almost a billion) in excess profits over what public interest staff recommended compared with other utilities. These profits are what’s driving our electric bill increases, plus Ga Power’s big bet on natural gas prices staying low, which they didn’t.

Remember, it’s “Georgia Power.”

Finally, let’s watch as Ga Power Treasurer and CFO Aaron Abramovitz admits to calling Public Interest Advocacy staff “radical” for suggesting Ga Power earn the same profits as other utilities. He gives his reason at minute 1:10. The hubris is stunning.

Next up: rooftop solar and climate change. Did the commissioners expand the popular net metering program beyond 5,000 customers (out of 2.7 million Ga Power customers)? Here’s a hint: