ATLANTA - Georgia Power Co. customers will be shelling out an additional $5.24 each month on average for electricity beginning next month.
The state Public Service Commission narrowly approved a $323 million rate increase Tuesday for Georgia's largest electric utility. The first rate hike in three years for Georgia Power will establish its rates for the next three years.
The increase represents a compromise between the utility and many of the parties that opposed Georgia Power's original request for a $406 million hike, including large industrial power customers.
The Governor's Office of Consumer Affairs and the Georgia Consumer's Utility Counsel also signed off on the agreement, which was concluded last month.
"Most, if not all, didn't get everything they asked for," said Commissioner Stan Wise, who sided with the majority in Tuesday's 3-2 vote.
But Commissioner Angela Speir, who opposed the increase, criticized the agreement for giving away too much to Georgia Power.
She said the 11.25 percent return on equity the utility is being allowed - the profit it is allowed to earn on its assets - is well above the national average for power companies, which ranges from 10 percent to 10.25 percent. Each 1 percent return on equity produces $100 million in revenue.
Speir said the $222 million Georgia Power will be allowed to recover from its environmental costs also is out of line.
Recovering some of the investments the utility has made to install expensive pollution controls was a key factor driving the rate hike request.
But Speir said there's no way to determine whether the amount the PSC approved is appropriate.
"These costs have not been and never will be certified by the commission," she said. "They're simply the company's budget projected three years out."
But Georgia Power spokesman John Sell said the utility must have the financial ability to maintain technology that produces electricity that is both a good value to consumers and stays within emissions limits.
The company plans to spend $2.2 billion through 2010 on pollution controls at coal-fired power plants scattered across the state.
"These are mandated costs by federal and state regulators," Sell said. "They'll be shared by our customers, so we can continue running these power plants."
Speir also slammed the three-year rate plan for failing to increase the discount that qualified senior citizens receive on their monthly bills. The discount will remain at $14.
Sell said Georgia Power officials do not believe that the testimony during three rounds of public hearings this fall justified increasing the discount.