Rising power bill costs here to stay

On Tuesday, Gov. Sonny Perdue signed into law legislation that will boost monthly bills for Georgia Power Co. customers. Now that it has become law, consumers are likely to have questions about how it will affect them.

 

Q: How much will my bill go up?

A: Georgia Power estimates the average residential customer, who pays about $100 per month today, would pay an extra $1.30 each month.

The charge will change, based on the pace of construction, financing rates charged to the company and the price of fuel used to generate power at existing plants. Based on the company's projected construction timeline, the monthly charge would rise by about $1.30 each of the six years the reactors are expected to be under construction, finally reaching $9 or so each month.

Q: If my bill is two or three times the average residential bill, will the construction charge also double or triple?

A: Yes.

Q: How much?

A: The initial charge will be about 1.3 percent of current monthly bills, according to Georgia Power's public statements to legislators and regulators. It considers its construction timetable a trade secret, making it exempt from public disclosure under the state's Open Records Act.

Publicly, company officials have said they expect the charge to increase yearly by an additional 1.3 percent. It expects construction to take about six years, which could bring the projected construction charge to 9 percent.

Q: Will commercial and industrial customers also pay this charge?

A: Commercial customers will pay the charge. Industrial customers can avoid the charge if they opt for "real-time pricing," which means they pay more for power used at peak periods and less at night and weekends, when demand is down.

That also means the electricity available to them can be restricted on peak-demand days, such as when air conditioners across the state are running nonstop.

Generally, factories are the only types of businesses able to switch to other fuel types on days when they don't have access to unlimited electrical power.

Q: When will my bill go up?

A: As soon as construction starts in earnest. Some preconstruction earth moving and erection of safety structures has already begun, but full construction must wait for approval by the federal Nuclear Regulatory Commission.

The company hopes construction will begin in early 2011.

Q: Why do they need the money now?

A: It will cover some of the cost of construction and financing for two nuclear reactors at Plant Vogtle near Waynesboro, Ga. Though the plant is owned by several utilities across the state, Georgia Power owns the biggest share. The other utilities have always had that right to charge customers for construction costs.

Q: When will my bill go down?

A: The charge will technically end when construction finishes, but as the reactors begin generating power, their costs will be included in the base rate. So the amount you pay won't change, only the way in which the company accounts for it.

When the construction is eventually paid off 60 years after operations begin, the cost will be subtracted from the base rate.

Q: What's to keep these construction charges from going higher?

A: The new state law permits Georgia Power to pass along these charges during construction, but it also gives the Georgia Public Service Commission the authority to review them to ensure they are legitimate. The company is required to pay for the commission to hire experts to monitor periodic construction reports.

Q: Is anyone required to give notice of any costs rising above the approved amounts?

A: Because the amount could change from month to month, depending on the level of ongoing construction at the time, the commission won't hold hearings before every change.

There is no limit on what can be charged as long as the commission deems the underlying construction expenses to be legitimate.


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