Summary
This 8-K filing from Southern Company (SO) reports on a significant development regarding Georgia Power Company's retail rate structure. On December 21, 2004, the Georgia Public Service Commission (Georgia PSC) approved a new three-year retail rate plan for Georgia Power, effective through December 31, 2007. This plan establishes a regulated return on common equity range of 10.25% to 12.25%, with a specific mechanism for sharing earnings above this threshold between rate refunds to customers and retention by Georgia Power. The filing also addresses the Plant McIntosh construction project. The Georgia PSC has approved the transfer of this jointly owned project at a fair market value of approximately $385 million. This approval includes a disallowance of $16 million from the original transfer cost, which will result in a reduction of Southern Company's 2004 consolidated net income by about $9.5 million. The impact of Plant McIntosh will be spread evenly over the three years of the rate plan. This 8-K provides crucial updates on regulatory approvals that will shape Georgia Power's financial performance and customer rates in the coming years.
Key Highlights
- 1Georgia PSC approved a new three-year retail rate plan for Georgia Power, effective through December 31, 2007.
- 2The rate plan establishes a regulated return on common equity range for Georgia Power of 10.25% to 12.25%.
- 3Earnings above 12.25% will be shared: two-thirds for customer rate refunds, one-third retained by Georgia Power.
- 4Retail rates will increase by approximately $194 million effective January 1, 2005, to cover increased costs.
- 5The Georgia PSC approved the transfer of the Plant McIntosh construction project at a fair market value of $385 million.
- 6A $16 million disallowance from the Plant McIntosh transfer cost will reduce Southern Company's 2004 net income by approximately $9.5 million.
- 7Georgia Power will not seek a general base rate increase unless its projected return on common equity falls below 10.25%.