State regulators on Monday will begin considering a proposed bill hike for Georgia Power customers.

If approved, the average Georgia Power residential customer using about 1,000 kilowatt hours per month and paying about $125 would see that monthly bill rise $24 to $149 a month by 2022, according to an analysis by the Southern Alliance for Clean Energy.

The Georgia Public Service Commission will start receiving testimony Monday in the first of three PSC hearings about the bill hike. Georgia Power will present its proposal and take questions from the PSC and intervening groups, which include environmental advocates such as the Sierra Club and Georgia Interfaith Power and Light as well as the business interests, such as the Georgia Restaurant Association and Kroger.

Georgia Power has proposed a combination of higher rates and a higher mandatory monthly fee to recoup billions in recent and future investments being made to improve the reliability and resiliency of the state’s electrical system and to comply with federal regulations. The company also intends to rebuild its storm restoration fund after Hurricanes Michael, Irma, and Matthew. Its June filing also pointed to the costs of the company’s environmental compliance programs, particularly the clean up of coal ash.

Environmental and consumer groups oppose the increase in the base fee, saying it discourages customers from saving energy and disproportionately burdens the poor and the elderly.

"When you put more of the bills into the fixed portion, into the fees where it can't be adjusted based on how much electricity you use, that means there is less incentive to use less electricity," said Chris Carnevale, Coastal Climate and Energy Manager for SACE. "It takes away customers' control to reduce their electricity bill, which is a problem in its own right. And then the other part of that is that there's an environmental impact, which is when you take away part of the incentive to reduce electricity, then it also dis-incentivizes things like solar energy and efficiency."

Equity is another big issue with increasing the base fee.

"Because when you put more of the bill into the fixed portion, and it's the same amount that each customer must pay each month, regardless of how much electricity they use, it's the people who use the least electricity who have the smallest bills who have the greatest proportional increase on their bills," Carnevale said. "And those low-usage customers are often working families who are in lower income, senior citizens, renters, and generally people who are often least able to afford the cost increase."

SACE, which is not an intervenor in the rate case, has not taken a position on the appropriateness of the size of Georgia Power's overall request, but it opposes nearly doubling the base rate charge from $10 a month to $17.95 by 2022. Georgia Power currently uses a "basic customer" method to calculate the incremental cost of each customer. That method charges each customer the same for costs such as reading the meter and preparing and sending the bill. The company is proposing to switch to a "minimum distribution system" method.

"It includes a lot more of the utility's other costs, like poles and wires investments," said Bryan Jacob, Solar Program Director at SACE. "They calculate a hypothetical minimum system that would have to exist, and then they effectively assign portions of that to each customer."

In its pre-filed testimony, Georgia Power says declining demand from energy efficiency and customers' use of alternative energy like solar are reasons it needs to adjust rates and fees.

"The Company is seeing an increasing penetration of customer solar generation on its system and expanded participation in energy efficiency. Interest in behind-the-meter customer generation is also increasing. Fuel cell technologies are being adopted across the country and battery prices continue to decline. Additionally, new technologies like smart thermostats enable customers to make informed decisions on how and when they use our system. In fact, Georgia Power, through its Marketplace site and other channels, is responsible for the installation of nearly 100,000 smart thermostats since 2013. As customers adopt these and other supply and demand-side technologies and install more efficient appliances, the Company must be sure it can help its customers with this transition," wrote Georgia Power's Larry Legg.

"In this regard, the Company’s rates must adapt to accommodate these changing needs and preferences," Legg continued. "Sending more appropriate price signals will help customers make the most economic decisions, while also ensuring that other customers are not impacted by these decisions. At the same time, this will also ensure that the Company is able to collect revenues needed to ensure a high level of customer satisfaction and reliability."

Regulators in other states have rejected the minimum distribution system methodology, Jacob said.

“(T)he minimum system method is likely to lead to the double allocation of costs to residential customers and over-allocation of costs to low-use customers," the Washington Utilities and Transportation Commission wrote in a 1990 rate case decision.

More recently, the National Association of State Utility Consumer Advocates opposed this kind of rate structure in a formal 2015 resolution because it “disproportionately and inequitably increased the rates of low usage customers, a group that often includes low-income, elderly and minority customers.”



None of the proposed bill hike is related to the overbudget and behind-schedule expansion of the nuclear Plant Vogtle. Ratepayers are already paying a monthly line item on their bills to pay for the plant's financing before it's complete. Once the new reactors come online in 2022 its multi-billion-dollar price tag will be figured into rates.

The upcoming hearing will be followed with another on Oct. 17, when PSC staff and intervenors will file their own testimony, responding to the Georgia Power request. A subsequent hearing will be held Nov. 4-7, where PSC staff and intervenors will be questioned about their testimony. If Georgia Power requests a rebuttal hearing, it will be held Nov. 25-26.

On Dec. 17, the Public Service Commissioners will vote on – or potentially alter – any potential settlement agreement between staff and Georgia Power. If there is no agreement, the Commission will make a decision based on the testimony.