Summary
This 8-K filing from Southern Company (SO) announces a significant development regarding Georgia Power's retail base rate adjustment application. Georgia Power and the Public Interest Advocacy Staff (PIA Staff) have reached a stipulation to settle the application concerning costs associated with Plant Vogtle Unit 3 and shared common facilities. The settlement, if approved by the Georgia Public Service Commission (PSC), would allow Georgia Power to include $2.1 billion of previously deemed prudent costs for Unit 3 and common facilities in its rate base, along with related depreciation expenses. This is a reduction from the $2.38 billion initially sought. Despite the reduction in the rate base, Georgia Power expects an annual increase in retail rates of approximately $302 million once Unit 3 goes into service. This increase will be partially offset by a $78 million decrease in the Nuclear Construction Cost Recovery (NCCR) tariff expected in early 2022. The remaining financing costs not included in the base rate will be recovered through the NCCR tariff or deferred. The final PSC order is expected on November 2, 2021, and the terms are subject to change. Investors should monitor the final PSC decision for definitive impact on revenue.
Key Highlights
- 1Georgia Power and PIA Staff have reached a settlement agreement on Georgia Power's application to adjust retail base rates.
- 2The settlement concerns the inclusion of costs related to Plant Vogtle Unit 3 and common facilities in the rate base.
- 3Georgia Power will include $2.1 billion of previously deemed prudent costs in its rate base, a reduction from the $2.38 billion initially sought.
- 4The settlement includes recovery of projected operations and maintenance expenses for Unit 3 and common facilities.
- 5Georgia Power anticipates an annual increase in retail rates of approximately $302 million after Unit 3 goes into service.
- 6A decrease in the NCCR tariff of approximately $78 million is expected effective January 1, 2022, partially offsetting the rate increase.
- 7The final decision from the Georgia PSC is expected on November 2, 2021, and the settlement terms are subject to change.