The utility says it needs the marginal rate increase to pay for a new construction phase that comprises 5,500 megawatts of new generation over the next five years; 300 miles of new transmission valued at $1.4 billion; and expenses of $875 million on environmental controls.
"Those costs have resulted in a capital spending budget of $1.6 billion in 2001," Georgia Power president/CEO David Ratcliffe says in a prepared statement. "Those costs need to be added to the rate base."
However, the company is willing to waive its rate increase request if the Public Service Commission will allow Georgia Pacific to continue operating with an earnings band, as it has for the last six years, and earn the 11% to 13.% ROE.
In its statement, the locally based company says it hasn't had a base rate increase since 1991. The utility notes customers received a $262 million rate reduction in 1998 and another $24 million rate reduction in 1999.
"Georgia Power's rates are more than 15% below the national average and its 1.8 million customers are in all but six of Georgia's 159 counties," Ratcliffe says.
The utility's top executive says the rate increase plan is a win-win scenario for the company and the customer. "This plan provides low, predictable rates to ensure that Georgians will continue to pay among the lowest prices for electricity in the nation," Ratcliffe says. "The plan assures customers will have the power they need, when they need it and will help to continue the economic expansion and growth of our already robust region."
The CEO says the rate increase plan avoids "potentially volatile price spikes" for customers. Georgia Power was required by the Georgia Public Service Commission to file a rate increase request by July 1.
Georgia Power is the largest subsidiary of Southern Company, a New York Stock Exchange-traded firm. Georgia Power serves customers in 57,000 square miles of the state's total land area of 59,000 square miles.
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