Summary
Southern Company's subsidiary, Georgia Power, has reached a settlement agreement with the Georgia Public Service Commission (PSC) Public Interest Advocacy Staff regarding its 2022 base rate case. This settlement, if approved by the PSC, outlines a multi-year Alternate Rate Plan (ARP) effective from January 1, 2023, through December 31, 2025. The agreement aims to resolve most issues in the rate case, with a key outcome being an increase in Georgia Power's annual base revenues over the next three years. The settlement proposes significant revenue adjustments across various tariffs, including base tariffs, environmental compliance, demand-side management, and municipal franchise fees. Notably, annual base revenue increases are projected to be approximately $213.6 million in 2023, $375.2 million in 2024, and $401.7 million in 2025. The plan also establishes Georgia Power's return on equity (ROE) at 10.5% and sets an equity ratio at 56%. It includes a revenue sharing mechanism for earnings above the approved ROE, with a significant portion allocated to regulatory assets and customer refunds. The PSC is scheduled to vote on the settlement on December 20, 2022, and the final approved terms may differ from the current agreement.
Key Highlights
- 1Georgia Power and PSC Public Interest Advocacy Staff reached a settlement agreement for an Alternate Rate Plan (ARP) covering 2023-2025.
- 2The settlement proposes annual base revenue increases for Georgia Power: ~$213.6M in 2023, ~$375.2M in 2024, and ~$401.7M in 2025.
- 3Key tariff adjustments include increases in traditional base tariffs and demand-side management tariffs, with a decrease in the environmental compliance recovery tariff in 2023.
- 4The settlement sets Georgia Power's Return on Equity (ROE) at 10.5% and an equity ratio of 56%.
- 5A revenue sharing mechanism is in place: 70% of earnings above the approved ROE will reduce regulatory assets, 10% will be refunded to customers, and 20% retained by Georgia Power.
- 6There is no recovery of earnings shortfall below the approved ROE, but Georgia Power may petition for an Interim Cost Recovery (ICR) tariff or file a full rate case if earnings are projected to fall short.
- 7The Georgia PSC is scheduled to vote on the settlement on December 20, 2022; the final approved terms may differ from the current agreement.