01—Abstract
Summary
Summary of the 8-K filed May 19, 2025. Cited figures are marked; the original filing is the authoritative source.
Southern Company's subsidiary, Georgia Power, has entered into a settlement agreement with the Georgia Public Service Commission (PSC) Public Interest Advocacy Staff that, if approved by the PSC, will extend the company's alternate rate plan (ARP) through December 31, 2028.
This agreement defers rate adjustments for 2026, 2027, and 2028, with storm damage costs to be addressed in a separate regulatory proceeding. The settlement maintains Georgia Power's retail return on equity (ROE) set point at 10.50%a and equity ratio at 56%, with a continuing ROE range of 9.50% to 11.90%.
Key modifications include the separate recovery of storm damage costs incurred through 2025, the continued amortization of regulatory assets, liabilities, and deferred tax credits, and a change in depreciation/amortization periods for certain generating assets to 13 years. Earnings above the ROE range will continue to be shared with customers, while shortfalls may trigger a request for an Interim Cost Recovery tariff.
02—Key points
Key Highlights
- Georgia Power and PSC Advocacy Staff reached a settlement to extend the alternate rate plan (ARP) through December 31, 2028.
- Base rates will not be adjusted in 2026-2028, except for storm damage costs incurred through 2025, to be recovered in a separate proceeding.
- Retail ROE set point remains at 10.50%, with an equity ratio of 56% and an ROE range of 9.50%-11.90%.
- Earnings above the ROE range will be shared: 40% to regulatory assets, 40% to customers, and 20% retained by Georgia Power.
- Deferred Investment Tax Credits (ITCs) and Production Tax Credits (PTCs) will be amortized over the ARP Extension Period.
- Depreciation/amortization period for certain generating plants and retired plant net book values will be 13 years starting January 1, 2026.
- The Georgia PSC is scheduled to vote on the settlement by July 1, 2025; approval is not guaranteed and terms may change.
03—Questions
Frequently Asked Questions
What is the main impact of this settlement on Georgia Power's rates?
The settlement defers base rate adjustments for 2026, 2027, and 2028. Any recovery of storm damage costs incurred through the end of 2025 will be handled in a separate regulatory proceeding and will be the primary potential adjustment to rates during this period.
How are earnings above the approved Return on Equity (ROE) range handled?
If Georgia Power's retail earnings exceed the 9.50% to 11.90% ROE range, 40% of the excess earnings will be applied to regulatory assets, 40% will be refunded to customers, and 20% will be retained by Georgia Power.
What happens if Georgia Power's earnings fall below the approved ROE range?
If Georgia Power projects earnings below the lower end of the ROE range, it may petition the PSC for an Interim Cost Recovery (ICR) tariff to adjust rates, or it may be required to file a full base rate case.
What are the key changes regarding tax credits and asset amortization?
Deferred Investment Tax Credits (ITCs) and Production Tax Credits (PTCs) will be amortized over the extended period. Certain ITCs generated during the ARP Extension Period will be amortized over five years, with additional amounts deferred. Sixty percent of PTC benefits generated will be credited to income tax expense, and the remaining forty percent will be deferred. Additionally, the depreciation and amortization period for certain generating plants and retired plant net book values will be extended to 13 years.
What is the timeline for the Georgia PSC's decision on this settlement?
The Georgia PSC is scheduled to vote on the settlement agreement by July 1, 2025. If the settlement is not approved, Georgia Power will be required to file its next base rate case by July 1, 2025.
04—Continue