ATLANTA, Nov. 1, 2012 /PRNewswire/ -- Georgia Power today filed a request with the Georgia Public Service Commission (PSC) to reduce fuel rates by approximately 7 percent and total annual billings by approximately $122 million.
That equates to a savings of approximately $1.82, or 1.6 percent, on the total monthly bill of a typical residential customer averaging 1,000 kilowatt-hours.
The new, lower rates would begin Jan. 1, 2013.
Last month, the company announced it would voluntarily trigger the Interim Fuel Rider (IFR) early. The IFR requires the company to adjust rates if the balance of its fuel accounts is significantly over- or under-recovered and was approved by the commission in June.
The proposed decrease would offset most of three previously scheduled increases that will take effect at the same time. Of the increases, one is due to new, clean-burning, natural gas combined-cycle facilities at Plant McDonough-Atkinson in Atlanta; another is related to the company's demand-side management (DSM) programs; and the third is due to a Nuclear Construction Cost Recovery (NCCR) tariff increase.
The three increases contribute to long-term rate stability and cost savings. The McDonough-Atkinson and DSM tariff changes will raise the typical residential customer bill by about $1.05 and $0.36, respectively, per month, while the increase to the NCCR will add about $0.85 per month. If the fuel reduction is applied against these increases, a typical residential customer should see a net increase of just 44 cents per month.
Fuel rates were reduced 19 percent on June 1 of this year. The continued drop in fuel costs was partially driven by lower natural gas prices as a result of increased natural gas supplies. The company has been able to expand its use of the low-cost gas with the addition of its new, highly efficient natural gas units at Plant McDonough-Atkinson. Lower demand for electricity resulting from the milder-than-normal summer weather was also a contributing factor.
The $567 million June reduction brought savings of approximately $8, or 6 percent, on the total monthly bill for a typical residential customer. Working with the PSC, the company was able to implement that decrease a month earlier than scheduled to help reduce summer power bills.
"Our state-of-the-art natural gas facility at Plant McDonough-Atkinson is already bringing tremendous value to all customers through lower fuel costs," said Georgia Power President and CEO Paul Bowers. "Investments like this, plus new nuclear, 21st century coal, renewables and energy efficiency, are further examples of how the Georgia Public Service Commission's long-term planning process benefits all Georgians by ensuring clean, safe, reliable energy at costs below the national average."
Fuel rates are set separately from base rates. Georgia law prohibits the company from earning a profit on fuel, while allowing recovery of all prudently incurred fuel costs.
Under the terms of the IFR adjustment mechanism, the PSC has 30 days to review the company's filing.
Georgia Power is the largest subsidiary of Southern Company, one of the nation's largest generators of electricity. The company is an investor-owned, tax-paying utility with rates below the national average. Georgia Power serves 2.4 million customers in all but four of Georgia's 159 counties.
SOURCE Georgia Power