What is the primary reason for Georgia Power's requested rate increase?

The primary reasons cited for the requested $615 million rate increase are to cover the costs of environmental compliance mandated by regulations and to fund ongoing investments in new generation, transmission, and distribution facilities necessary for growth and reliability. Increased operation and maintenance costs are also a factor.

What are the key changes proposed in the "Proposed Alternate Rate Plan"?

The Proposed Alternate Rate Plan aims for a more structured, multi-year approach. Key changes include the introduction of an Adjustable Cost Recovery (ACR) tariff to manage earnings within an approved ROE band, a cost-sharing mechanism for earnings above or below that band, a new Certified Capacity Cost Recovery (CCCR) tariff for new generation projects, and enhanced Environmental Compliance Cost Recovery (ECCR) and Demand Side Management (DSM) tariffs.

How will the proposed Adjustable Cost Recovery (ACR) tariff work?

The ACR tariff is designed to adjust customer rates if Georgia Power's projected earnings for the upcoming year are expected to fall outside the ROE band approved by the PSC. If earnings are projected to be too high, adjustments would be made to bring them down to the midpoint of the band. If projected earnings are too low, adjustments would also be made to bring them back to the midpoint. A sharing mechanism is in place for actual earnings that deviate from the band.

When can investors expect a final decision on this rate case?

The Georgia Public Service Commission (PSC) is expected to issue a final order regarding Georgia Power's 2010 Rate Case in December 2010.

SOUTHERN CO 8-K SEC Disclosure

Summary

This 8-K filing details Georgia Power Company's "2010 Rate Case" filing with the Georgia Public Service Commission (PSC) on July 1, 2010. The company is seeking a total retail rate increase of $615 million, or 8.2%, effective January 1, 2011, to recover costs associated with environmental compliance and investments in new generation, transmission, and distribution infrastructure. The filing also proposes significant enhancements to the existing "2007 Retail Rate Plan" through a "Proposed Alternate Rate Plan," aiming for a more multi-year operational structure. The Proposed Alternate Rate Plan introduces key mechanisms like an Adjustable Cost Recovery (ACR) tariff, designed to keep Georgia Power's earnings within an approved Return on Equity (ROE) band by making adjustments to customer rates if projected earnings fall outside the band. It also outlines a cost-sharing mechanism for earnings above or below the approved ROE band. New tariffs for Certified Capacity Cost Recovery (CCCR) and enhancements to existing Environmental Compliance Cost Recovery (ECCR) and Demand Side Management (DSM) tariffs are also proposed to recover specific costs, including those for new generation facilities. The PSC is expected to issue a final order in December 2010.

Key Highlights

1Georgia Power filed a base rate case seeking an $615 million (8.2%) retail rate increase, effective January 1, 2011.
2The requested increase is primarily driven by environmental compliance costs and investments in new generation and infrastructure.
3The filing proposes a "Proposed Alternate Rate Plan" to modify the existing three-year rate plan for multi-year operation.
4A new Adjustable Cost Recovery (ACR) tariff is proposed to maintain earnings within an approved Return on Equity (ROE) band (plus or minus 100 basis points).
5A cost-sharing mechanism is proposed for earnings above (2/3 refund to customers) or below (2/3 to customers) the approved ROE band.
6New Certified Capacity Cost Recovery (CCCR) and enhanced Environmental Compliance Cost Recovery (ECCR) and Demand Side Management (DSM) tariffs are proposed.
7The Georgia PSC is expected to issue a final order on the rate case in December 2010.

SOUTHERN CO 8-K Report, Corporate Update (Jul 1, 2010)

Summary

Key Highlights

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