Thread by @PattyforGaPSC

The dust has settled and it’s time to debrief what happened in Ga Power’s rate proceeding last Tuesday (12/20/22) and how it impacts Georgia Power customers. 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. That does not mean your rates will only go up every three years. In fact rates will go up a shocking 5 times next year as I will explain now in Part 1.

Elected officials at the

Georgia Public Service Commissioners rate increase will raise Ga Power electric bills 12% over three years. In January the average bill will increase about 2.5% / mo., in 2024 4.5% / mo., and in 2025 about 4.5% 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:
1. An enormous $2 billion in uncollected natural fuel surcharges, raising bills $15-20/mo. depending on the length of the recovery period.
2. Plant Vogtle Unit 3 nuclear reactor

going into commercial operation in Q1, raising bills $5/mo.
3. Plant Vogtle Unit 4 completion in Q4, raising bills $15/mo.
Two other rate increases will also happen in 2023 but I have no info on how much: addl billions for coal ash cleanup & Plant Vogtle’s cost overruns.

All in,

Ga Power customers can expect their electric bills to increase a stunning $40-50/month by the end of 2023. As one consumer advocate said, "Completely out of line".

The $1.8 billion rate increase included very high profits for Ga Power due to Plant Vogtle so Wall Street stock analysts and bond ratings analysts won't downgrade SO stock and Ga Power bonds due to the extreme risk of this project so far over budget and late.

And it's working!

Not all commissioners agreed that delivering excessive profits was the right thing to do. Watch as one commissioner tries to rein in the numbers a tiny amount, but fails in getting a 2nd for his motion. . Mr. Echols' cell phone was very fascinating.

What surprised me was that two commissioners up for election in 2023 (@timechols and @FitzJohnsonGA) didn't vote to help Commissioner McDonald. What were they thinking? Maybe that voters wouldn't find out? I beg to differ.

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.

Elected commissioners also allowed Ga Power to continue a capital structure far richer in profits than other utilities: Ga Power has a 56% equity to 44% debt compared to the U.S. utility structure of 51% equity to 49% debt. 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.

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 very rich float of 240 basis points 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 and utility finance experts recommended.

Let's watch as Ga Power Treasurer & CFO Aaron Abramovitz admits to calling Public Interest Advocacy staff “radical” for suggesting Ga Power earn the same profits as other utilities. But what does radical mean? PIA staff defines the term and asks why Mr. Abramovitz used that term.

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:

#energytwitter #gapol #utilty #utilitybills #electricity
#highelectricbills #highutilitybills