ATLANTA (AP) — Georgia Power executives asked Wednesday to raise prices by nearly $8 a month for typical residential customers because the electric company said its costs are rising while sales remain slumped following a deep recession and tepid recovery.
The regulatory hearing went forward after Public Service Commissioner Lauren "Bubba" McDonald Jr. made an unexpected move Tuesday. He requested a one-day delay in testimony so the Southern Co. subsidiary and the PSC staff could try negotiating an alternative to the proposed rate hike. No deal was struck.
Georgia Power wants to collect an additional $482 million from its customers next year, then hold rates flat for the following two years. That translates into a monthly price increase of nearly $8 for a typical residential customer, according to company filings.
Under the plan, the electric monopoly would earn a profit of 10.25 percent to 12.25 percent for every dollar it invests in its electricity system. If profits exceeded the top range, customers would get back two-thirds of the excess collections. Georgia Power CFO Ron Hinson said those profit levels are necessary to attract shareholders whose cash is used to build and maintain an electric system serving nearly 2.4 million customers.
"We need to establish rates that allow us to continue our financial position in meeting shareholder expectations," Hinson said during testimony.
Consumer advocacy groups including Georgia Watch and the state branch of the AARP are certain to object to those profit margins. While Georgia Power says its costs are rising, Southern Co. still reported $297 million in net income during the three-month period ending in June. Those earnings were down 52 percent compared to last year, mostly due to losses on building a coal gasification plant in Mississippi.
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