The Georgia Public Service Commission authorized an alternate rate plan for Georgia Power Co. for the period starting Jan. 1, 2020, and continuing through Dec. 31, 2022.
The approved plan, or ARP, reflects a settlement agreement among Georgia Power and large energy users including Kroger Co., the Georgia Industrial Group, the Georgia Association of Manufacturers and The Commercial Group Inc. The city of Atlanta and the Metropolitan Atlanta Rapid Transit Authority also signed on, according to a Form 8-K filed by Georgia Power on Dec. 17.
Under the approved ARP, the Southern Co. subsidiary will recover through its existing tariffs estimated increases of $342 million in 2020, $181 million in 2021 and $386 million in 2022, primarily through traditional base rates and an environmental compliance cost recovery tariff, though specific amounts vary each year. The return on equity is set at 10.50%.
Georgia Power's earnings will be evaluated against a retail return on equity range of 9.5% to 12%. Any retail earnings above 12% would be shared, with 40% being applied to reduce regulatory assets and another 40% refunded directly to consumers. The remaining 20% will be retained by Georgia Power.
In June, the utility filed a rate case, seeking a multistep $942 million permanent base rate increase based on a 10.9% return on equity, at 56% of capital, and a 7.93% rate of return on an average rate base valued at $20.079 billion.
The PSC Public Interest Advocacy Staff recommended an $895 million base rate based on a 9.2% return on equity, at 51% of capital, and a 6.69% rate of return on an average rate base valued at $20.065 billion.
Georgia Power will not file for a general base rate increase while the 2019 ARP is in effect. It is required to file a general rate case by July 1, 2022. (Georgia PSC Docket No. 42516)