ATLANTA — Georgia Power Co. customers will see their monthly bills drop about $8 to reflect the costs of fuel used in generating electricity and a unanimous vote Thursday by the Public Service Commission.
The company got permission to reduce customer bills while the commission completed its formal consideration. The 6 percent reduction may offset increases due to higher cooling needs in the summer and surcharges already added for financing the construction of two reactors at Plant Vogtle.
State law permits the utility to pass along the cost of the fuel to consumers – without a profit – as long as the company was “prudent” when it incurred the expenses. The commission can only control how quickly it charges for the fuel and decides if a given expense was prudent.
Wide fluctuations in coal and natural gas prices in recent years led to periods where the company was paying more for fuel than it was charging. That built up a large balance in what customers owed the company, but the commission was reluctant to stick consumers with the cost during a weak economy, running up the balance to a peak of $1 billion.
Then, the commission allowed the company to recover costs faster as natural gas prices were dropping. Now, the outstanding balance is zero.
Two commissioners tried to block about $3 million in expenses from being passed along for a trio of 2011 power outages. Commissioner Lauren “Bubba” McDonald and Chairman Tim Echols voted to accept the recommendation of the commission’s consultant, William Jacobs.
“This outage was avoidable and the result of clearly imprudent management,” he testified in May.
But Commissioner Doug Everett led the objection, arguing that under cross examination Jacobs waffled, leaving the commission without a solid recommendation.
“How can I sit here when the law said it’s gotta be clearly imprudent ... when the man, the only man who can tell us where it is and has access to all the information says, ‘I can’t make a distinction between clearly imprudent and imprudent. I don’t know what that means.’?” Everett asked.
Commissioner Stan Wise also rejected McDonald and Echols’ motion for a different reason. He said commission staff had worked out an agreement with the company on the wording of the new fuel-billing arrangement, and changing it by disallowing the $3 million wouldn’t be fair to Georgia Power.
“You use everything that you gained in these negotiations, and then you take it a step further,” he said. “... I just think it’s wrong.”
Commissioner Chuck Eaton sided with Everett and Wise in rejecting the disallowance.
Eaton and Wise are up for re-election this year.