Georgia Power Co. on Friday filed for a rate reduction for its customers that will be in effect for about two years and would reduce most residential bills by about 6 percent.
According to a Georgia Public Service Commission summary of the company’s filing, the fuel rate decrease is mainly the result of reduced energy costs associated with lower natural gas prices and conservative fiscal planning by the commission. Other contributing factors, according to Georgia Power, include lower demand for electricity, coupled with mild weather.
The reduction would amount to about $567 million annually – or a monthly reduction of about 6 percent for the typical residential consumer averaging 1,000 kilowatt-hours, the commission said. Total fuel rate reductions would average about 19 percent.
If approved, the rates will begin July 1.
Under Georgia law, Georgia Power is entitled to recover fuel costs associated with generating electricity and those costs are passed on to ratepayers. Beginning more than a decade ago, fuel prices for coal, natural gas, fuel oil and other sources increased sharply because of limited energy supplies in the U.S. and increased demand worldwide, primarily from the growing economies of China and India.
To reduce the impact on customers that an immediate dollar-for-dollar pass-through would have had on monthly bills, the commission required the utility to carry a fuel cost balance. Although it has fluctuated, the under-recovered balance at one time reached close to $1 billion.
According to Friday’s filing by Georgia Power, the balance is to be completely paid off by today.
The Commission will conduct a hearing on the matter in early June.
Georgia Power is an investor-owned utility that serves 2.35 million customers in all but four of Georgia’s 159 counties. It is the largest of four electric utilities that make up Southern Co.