A recent column by Sierra Club greatly distorts the rate case proposal by Georgia Power Company (Schoenberg, Nov. 14, 2019, “Georgia Power rate hike proposal is deeply unfair”).
First, if Mr. Schoenberg is going to offer opinion on electric policy, he should be aware that electric utilities measure energy in kilowatt-hours, not therms, which are used by gas utilities. He also should know that state law requires the Georgia Public Service Commission to balance not only the interests of customers, but the financial strength of the utility as well. This is because we all benefit from financially healthy utilities with good credit ratings, which leads to resilient and diverse power systems financed with low cost capital. We’ve seen the blackouts, bankruptcies and cost shifts that have occurred in other states when utilities are prevented from making and recovering investments or when they are forced to comply with progressive energy policies at the expense of not providing reliable, affordable electric service.
As an activist and someone who follows decisions of the PSC, they hardly give Georgia Power “whatever it proposes.” If that was the case, I would expect our rates would not be 16% below the national average. What is true is that the company is entitled by law to recover and earn a return on investments that it makes. We live in a free market society.
The Sierra Club is not a consumer watchdog group, as the column would lead people to believe. They started out as a bipartisan organization conserving wilderness but have become radicalized, focused on global warming. Their real agenda in this rate case is to shutter the few remaining coal generation plants and disallow the company from getting recovery on the closure of coal ash ponds used in power generation.
The Sierra Club falsely claims Georgia Power’s proposal is unfair, impacts the poor, and would cause customers to pay among the highest monthly fees in America. None of this is true. The company is seeking an adjustment of approximately 12% phased in over three years to recover certain investments made since 2013 and more investments planned. The increase would be applied through gradual increases to the Basic Service Charge, which is a fixed charge designed to cover the cost of being connected to a reliable grid. These are costs that do not vary with energy usage and the charge is the same for all residential customers. The current Basic Service Charge of $10 has only been updated once in 30 years and is the lowest among the state’s 41 Electric Membership Cooperatives. Many readers of this publication are customers of Cobb EMC and their basic service charge ranges up to $28 for some residential customers. Even if the PSC were to allow the Basic Service Charge to be adjusted to $17.95 over the next three years, Georgia Power’s charge would still be ranked toward the bottom when compared to the EMCs.
Last, the increase in the base charge would not “disincentivize conservation” or hurt solar customers. My mother’s bill averages around $150.00 each month. After paying the proposed new charge of $17.95, that leaves $132 I can still reduce through conservation or offset with solar power. There is no amount of conservation that can get it below the base rate.
All customers should pay the fair cost of being connected to the grid, whether you have solar on your roof, an electric vehicle in your garage, or a high-efficiency home.