What is the primary purpose of this 8-K filing?

The primary purpose of this 8-K filing is to inform investors that Southern Company's subsidiaries, Georgia Power and Savannah Electric, have jointly filed a request with the Georgia Public Service Commission (PSC) for a fuel cost recovery rate increase. This request is intended to allow the companies to recover their actual and projected fuel costs, which have exceeded their current recovery rates.

How will the proposed rate changes affect customers?

The proposed rate changes will have a mixed impact. Average residential customers of Georgia Power are expected to see a monthly increase of approximately $7.22 (8.1%). In contrast, residential customers in the former Savannah Electric territory are projected to see a monthly decrease of approximately $8.14 (6.4%). Business customer impacts will vary based on their specific rate class and usage.

What are the "under-recovered fuel expenses" mentioned in the filing?

Under-recovered fuel expenses refer to the difference between the actual cost of fuel (like coal, natural gas, and oil) purchased by the utility companies to generate electricity and the amount they were authorized to collect from customers for those fuel costs through their existing rates. In this case, the companies had accumulated significant under-recoveries, amounting to $78 million for Savannah Electric and $745 million for Georgia Power as of January 2006, due to rising fuel prices.

When is the Georgia PSC expected to make a decision, and what is the potential impact of their ruling?

The Georgia PSC is expected to rule on this fuel cost recovery request in June 2006. The outcome of this ruling is currently undetermined and could materially affect the future revenues of Georgia Power and Savannah Electric, as well as the rates charged to their customers.

SOUTHERN CO 8-K SEC Disclosure

Summary

This 8-K filing from Southern Company (SO) on March 17, 2006, details a significant regulatory filing by its subsidiaries, Georgia Power and Savannah Electric. These subsidiaries jointly requested a fuel cost recovery rate increase from the Georgia Public Service Commission (PSC), effective July 1, 2006. The request aims to align recovery with projected future fuel costs and address substantial under-recovered fuel expenses accumulated over the preceding year. The proposed increase is notable for its varying impact on customers: an average residential customer of Georgia Power would see an increase of approximately $7.22 per month (8.1%), while a residential customer in the former Savannah Electric territory would experience a decrease of approximately $8.14 per month (6.4%). The filing also reflects proposed rate adjustments linked to the anticipated merger of Georgia Power and Savannah Electric, expected to be finalized by July 2006. Investors should monitor the PSC's decision in June 2006, as the outcome could materially affect the subsidiaries' revenues and customer rates.

Key Highlights

1Georgia Power and Savannah Electric filed a joint request for a fuel cost recovery rate increase with the Georgia PSC, effective July 1, 2006.
2The request seeks to recover estimated future fuel costs and address significant under-recovered fuel expenses.
3The proposed increase would result in an average monthly bill increase of about $7.22 (8.1%) for Georgia Power residential customers.
4Conversely, the proposal includes an average monthly bill decrease of about $8.14 (6.4%) for residential customers in the former Savannah Electric territory.
5The filing also incorporates proposed rate changes related to the pending merger of Georgia Power and Savannah Electric, expected by July 2006.
6Georgia Power projects annual fuel costs of $2.48 billion, with the current rate recovering only $1.81 billion.
7As of January 2006, under-recovered fuel balances were substantial: $78 million for Savannah Electric and $745 million for Georgia Power.

SOUTHERN CO 8-K Report, Corporate Update (Mar 17, 2006)

Summary

Key Highlights

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