Georgia electricity Co.’s plan to freeze base electricity rates through the end of 2028 was approved by utility regulators on Tuesday, according to AP. However, opponents contend that if costs to feed new computer data centers increase, customers may be at danger in the future.
The idea was previously approved by the corporation and regulatory staff, and the five Republicans on the Georgia Public Service Commission voted in favor of it unanimously.
Following the vote, Commissioner Tim Echols stated, “Freezing these rates demonstrates that we are listening to ratepayers and that we are doing everything in our power to protect them and keep this state’s economy growing.”
When commissioners decide how consumers will pay for $862 million in storm damage, primarily from 2024 Hurricane Helene, rates may still increase the following year. According to Georgia Power Chief Financial Officer Aaron Abramovitz’s testimony, the firm believes that any rate increases to compensate for the damage will be balanced by lowering the charge that consumers have been paying since 2023 to cover the increased expenses of purchasing coal and natural gas.
Due to increased natural gas prices and building projects, such as the installation of two new nuclear reactors at Plant Vogtle near Augusta, customers have seen their rates increase six times in recent years. With taxes included, the average Georgia Power residential customer now pays over $175 per month.
Echols and Commissioner Fitz Johnson can run for reelection this year without fear of a rate hike thanks to the arrangement. In November, Echols will take on Democrat Alicia Johnson. In order to compete against Fitz Johnson in the general election, Democrats Peter Hubbard and Keisha Sean Waites are facing off on July 15.
The rate freeze, according to Georgia Power CEO Kim Greene, is a terrific outcome for consumers, balancing the benefits of exceptional economic growth for all parties involved and ensuring that we are still prepared to sustain growth in our state.
The deal’s detractors claimed it did not adequately regulate the huge earnings of Georgia Power, a division of Southern Co., based in Atlanta, and it did not adequately examine the business’s operations. Commissioner Lauren McDonald made an unsuccessful attempt on Tuesday to reduce the company’s return on equity, or the amount it may make from its investments, from 11.9% to 11.5%. The primary factor influencing the company’s profitability is return on equity.
Georgia Power serves 2.3 million customers throughout the state and is the only privately owned electricity utility in the state. Georgia Power brought in $11.3 billion last year and gave Southern Co. $2.5 billion in profits.
The business anticipates a sharp rise in computer data center demand. Commission guidelines now support Georgia Power’s promise that normal customers won’t be responsible for paying for the transmission lines and power plants required to electrify data centers. In discussions with commission employees, however, the business stated that it could request a rate rise of up to $2.6 billion over a three-year period. Rather, the business and employees worked out an agreement that would allow the business to increase its return on equity without raising rates by using tax credits and other financial strategies.
When the commission granted Georgia Power’s unprecedented request to construct additional power plants outside of its regular schedule last year, the business promised to lower prices, according to the opponents. They questioned why rates were remaining unchanged rather than declining. An expert witness for the Southern Alliance for Clean Energy and other environmental organizations, John Wilson, described it as a rate rise that was concealed.
Advocates had demanded that Echols, McDonald, and Commission Chair Jason Shaw abstain from the vote, arguing that their endorsement of the agreement prior to hearing evidence was a violation of the commissioners’ quasi-judicial function. While McDonald attended a press conference but remained silent, Shaw and Echols spoke in support of the arrangement. Having done nothing illegal, all three commissioners refused to disqualify themselves.
Georgia Power’s three-year plan to produce enough electricity to meet the state’s demands is still being considered by commissioners at the time of the deal. According to that strategy, the demand for electricity will rise significantly, necessitating the construction of new power plants or the acquisition of existing ones.
In order to guarantee that the utility can finance improvements, a rate plan is usually approved following the integrated resource plan. Rather, starting in 2029, Georgia Power will either absorb the expenses or try to pass them on to customers.
