8-KOther Events

SOUTHERN CO 8-K Report, Corporate Update (Dec 18, 2007)

Filed December 18, 2007For Securities:SOSOJESOJFSOJCSOJDSOMN

Summary

This 8-K filing by Southern Company (SO) and its subsidiary Georgia Power Company reports on the approval of a new three-year retail rate plan by the Georgia Public Service Commission (PSC) for Georgia Power, effective January 1, 2008, through December 31, 2010. This "2007 Plan" was a result of a settlement agreement among Georgia Power and various stakeholders, including consumer advocates and industrial groups. The approved plan allows for an increase in Georgia Power's retail base rates by approximately $99.7 million, intended to recover costs related to investments in transmission, distribution, generation, and increased operating expenses. Additionally, an Environmental Compliance Cost Recovery (ECCR) tariff will be implemented, adding approximately $222 million to rates to cover costs associated with environmental controls. These increases translate to an estimated $1.55 per month for the average residential customer for base rates and $3.60 per month for the ECCR tariff.

Key Highlights

  • 1Georgia Power received approval for a new three-year retail rate plan from the Georgia PSC, effective January 1, 2008 - December 31, 2010.
  • 2The rate plan is based on a Settlement Agreement between Georgia Power and a coalition of stakeholders.
  • 3Retail base rates will increase by approximately $99.7 million annually to cover investments and operating costs.
  • 4An Environmental Compliance Cost Recovery (ECCR) tariff will add approximately $222 million annually for environmental control costs.
  • 5Average residential customers will see an estimated monthly increase of $1.55 for base rates and $3.60 for the ECCR tariff.
  • 6Georgia Power's earnings will be evaluated against a retail return on common equity (ROE) range of 10.25% to 12.25%.
  • 7Earnings above 12.25% ROE will be split, with one-third applied to the ECCR tariff and two-thirds to rate refunds, with no base rate increase sought unless ROE falls below 10.25%.

Frequently Asked Questions

The main event is the approval of a new three-year retail rate plan for Georgia Power Company by the Georgia Public Service Commission (PSC), effective from January 1, 2008, to December 31, 2010.

The plan allows for an increase in Georgia Power's retail base rates by approximately $99.7 million annually to cover investments and operating costs. Additionally, an Environmental Compliance Cost Recovery (ECCR) tariff will add approximately $222 million annually for environmental control costs. For the average residential customer, this translates to an estimated monthly increase of $1.55 for base rates and $3.60 for the ECCR tariff.

Under the new rate plan, Georgia Power's earnings will be evaluated against a retail return on common equity range of 10.25% to 12.25%.

If Georgia Power's earnings exceed 12.25% ROE, one-third of those excess earnings will be applied to the ECCR tariff, and two-thirds will be returned to customers through rate refunds. The company will not file for a general base rate increase unless its projected retail ROE falls below 10.25%.