Newspaper article The Florida Times Union

Power Bill May Go Up by $7; It Would Cover Fuel Cost Spikes of '05

Newspaper article The Florida Times Union

Power Bill May Go Up by $7; It Would Cover Fuel Cost Spikes of '05

Article excerpt


ATLANTA -- Even though natural gas and coal prices have begun dropping, it may not be enough to stop another jump in electric bills for Georgia Power customers starting this summer.

The utility wrapped up two days of hearings Thursday in front of the Georgia Public Service Commission. It's asking for a $556 million a year increase to cover future expenses for fuel needed to generate electricity. The extra money also would cover the shortfall caused by last year's historic spikes in natural gas costs.

The request would increase average residential bills by 8.1 percent, or $7.22 a month.

Under state law, the commission is obliged to let the regulated utility collect money for fuel expenses from customers, but it can't make a profit on those expenses. The challenge is making an accurate projection of which way fuel prices will head.

If the projection is wrong, and the rates don't allow the company to recover all of the fuel costs, the law entitles the company to get the difference from its customers. The commission allowed Georgia Power to charge customers more based on last year's projection, but the calculations were made before hurricanes Katrina and Rita disrupted natural gas supplies in the Gulf region and sent prices soaring.

"It keeps getting deeper and deeper," Commissioner David Burgess said of the fuel expense shortfall. "This thing started last year with a half a billion underrecovery. This case [was filed] at $745 million. Now, it's $800 million underrecovered."

The jump in fuel costs was a large part of Georgia Power's decision to merge Savannah Electric into the larger company's operations and pay for future expenses together. The merger was supposed to lower costs for Savannah Electric's customers by 6.4 percent, or $8.14 a month -- less in fuel costs if the merger takes effect in July. …

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