Battle over power bills looms
As posted on June 5, 2008 on www.romenews-tribune.com
By Jake Armstrong, Morris News Service
On one side is a consortium of paper, building products and textile manufacturers who want the utility to charge her — and every other residential customer — less for the fuel it needs to produce energy in colder months, and more during summer months, when Wright cranks up the air conditioner in her Atlanta home.
Pricing like that better reflects the cost of fuel, which rises with the temperature in summer, and could spur consumers to conserve energy, the consortium says.
On the other side is a division of the state that goes to bat before utility regulators for residents and small businesses, the Consumers’ Utility Counsel, which says such a move would unfairly shift millions of dollars worth of fuel costs from large industrial users to customers like Wright and mom-and-pop merchants.
In the middle is Wright, who like many people does not want to pay more for power but wants to conserve energy.
“I think it is awful when everything is going up except for salaries,” said Wright, 52. “I am going to use less energy anyway. It just costs too much.”
The point of contention between the consortium and the Consumers’ Utility Counsel is a proposed return to seasonal fuel rates, which cropped up late last month as Georgia Power gained the Public Service Commission’s approval to raise its fuel cost recovery surcharge. The commission gave the company the go-ahead to charge an additional $3 to the average residential customer to cover a $220 million gap created by the rising cost of coal and other power-generation fuels.
Currently, Georgia Power charges an average rate year-round to purchase fuel, which by law it cannot make a profit on. From time to time, the commission adjusts the fuel charge according to costs as they fluctuate.
Had seasonal fuel rates been in place, a standard residential bill would have risen an average of 8 cents a month in the next 12 months, according to Jeffry Pollock, a consultant for the consortium.
But in four summer months alone, bills would have jumped by $6.25 under seasonal fuel rates, said Matthew Hardy, director of the Consumers’ Utility Counsel. The plan proposed also would have shifted $2.5 million in fuel costs paid by industrial users to residents and small businesses, Hardy said.
Additionally, Hardy said seasonal rates have led to large undercollections of fuel costs in the past — as much as $40 million when last in effect — and consumers must pay that sum, with interest, through their power bills.
Leaving the fuel costs collection as is spreads the risk of spikes in fuel costs among all customers, Hardy said.
Attorneys for the consortium, who did not return calls for comment, said in a filing with the PSC that residential customers are the cause of higher summer fuel costs because they use more power in summer. That added demand requires the construction of new power plants that wind up being paid for in everyone’s bills.
When last in effect, seasonal fuel rates added about $3 to bills during summer months. But they are off the table, for now.
A majority of commissioners voted May 20 not to take up the seasonal fuel costs until the Consumers Utility Counsel, the consortium, the utility and commission staff — collectively known as the Seasonal Working Group — make a recommendation on whether to return to that rate structure, which was last in place in 2005. It is unclear when the report will be finished.
But industry groups redoubled their push for seasonal fuel rates Monday and asked the commission to reconsider its decision to put off fuel rates, saying commissioners have enough evidence showing the need for seasonal rates and can do so in absence of the Seasonal Working Group’s report.
Georgia Power does not have a preference whether it charges seasonal or average rates, said spokesman John Sell.
“It’s really a policy decision for the Public Service Commission, and whatever decision they make, that is the one we will support,” Sell said.
Where does the money go?
A breakdown of a monthly residential Georgia Power bill, based on 1,000 kWh average usage:
- $58.73 Base revenue
- $38.24 Fuel cost recovery
- $3.60 Environmental compliance fee
- $2.06 Franchise fees
- .09 Energy efficiency promotion
- $102.72 Total
Source: Georgia Power
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