01—Abstract
Summary
Summary of the 8-K filed July 1, 2025. Cited figures are marked; the original filing is the authoritative source.
Southern Co. (SO) announced via an 8-K filing that its subsidiary, Georgia Power Company, has secured approval for an extension of its Alternate Rate Plan (ARP) through December 31, 2028.
This "ARP Extension" will maintain Georgia Power's current retail base rates for 2026, 2027, and 2028, excluding potential adjustments for storm damage costs incurred through the end of 2025, which will be addressed in a separate regulatory proceeding. The approved plan continues Georgia Power's retail return on common equity (ROE) set point at 10.50%a and maintains the ROE range of 9.50% to 11.90%.
Earnings above the 11.90%b ROE will be shared, with 40% allocated to regulatory assets, 40% to customer refunds, and 20% retained by Georgia Power. Importantly, there is no recovery for earnings shortfalls below 9.50% on an actual basis, though Georgia Power may petition for interim cost recovery if it projects earnings below this threshold.
02—Key points
Key Highlights
- Georgia Power's existing Alternate Rate Plan (ARP) extended through December 31, 2028.
- Retail base rates for 2026, 2027, and 2028 will remain unchanged, except for storm damage costs.
- Potential recovery for storm damage costs incurred through December 31, 2025, will be determined in a separate regulatory proceeding.
- Retail Return on Equity (ROE) set point remains at 10.50% with an approved range of 9.50% to 11.90%.
- Earnings above the 11.90% ROE will be subject to a 40% customer refund, 40% regulatory asset allocation, and 20% Georgia Power retention.
- No actual basis recovery for ROE shortfalls below 9.50%; Georgia Power may seek Interim Cost Recovery (ICR) if projected below this level.
- Georgia Power is required to file a base rate case by July 1, 2028.
03—Questions
Frequently Asked Questions
What is the primary impact of the ARP Extension on Georgia Power's rates?
The ARP Extension means that Georgia Power's retail base rates will remain the same for 2026, 2027, and 2028, with the exception of potential adjustments for storm damage costs incurred through December 31, 2025, which will be handled in a separate regulatory process.
How will Georgia Power's profitability be affected under this extended plan?
Georgia Power's retail Return on Equity (ROE) is set to continue within a range of 9.50% to 11.90%, with a target of 10.50%. If earnings exceed 11.90%, a significant portion (40%) will be refunded to customers, 40% will go to regulatory assets, and the company will retain 20%. Notably, there is no automatic recovery if earnings fall below 9.50%, though the company can petition for interim rate adjustments if it anticipates such a shortfall.
Are there any provisions for unexpected storm costs?
Yes, the ARP Extension allows for a separate regulatory proceeding to address the recovery of actual reasonable and prudent storm damage costs incurred through December 31, 2025. This proceeding is expected to be filed between February 1, 2026, and July 1, 2026, with any approved rate adjustments becoming effective approximately 90 days after the filing.
Will Georgia Power be able to file for rate increases during the ARP Extension Period?
Generally, no. Except for the specific provisions related to storm damage costs, Georgia Power will not file for a base rate increase while the ARP Extension is in effect. However, the company is required to file a full base rate case by July 1, 2028.
04—Continue