Georgia Power customers will see lower energy rates, starting June 1, one month earlier than had been projected.
The Georgia Public Service Commission unanimously approved that as the date when Georgia Power will implement the reduction in the Fuel Cost Recovery (FCR) rate, a measure that comes one month earlier than scheduled.
The reduction, officials point out, is partly the result of lower natural gas prices that, along with other fuels, sharply increased over the past decade due to global demand.
The average Georgia Power residential customer who uses 1,000 kilowatt hours of electricity will see FCR rates drop approximately $8 per month, according to officials with the Commission and Georgia Power.
“Fuel rates are set separately from base rates,” said Carol Boatright, spokeswoman for Georgia Power. “Georgia law prohibits the company from earning a profit on fuel, while allowing recovery of all prudently incurred fuel costs.”
Boatright noted any billings that occur after June 1, will reflect the new, lower FCR rates. She anticipates the new FCR rates will be effective for a two-year period based on current fuel-price projections.
The spokeswoman added that summer rates also will go into effect June 1, continuing through September. Those summer rates, she continued, are typically higher than the eight-month long winter rates.
“The fiscally conservative attitude of the Commission and the willingness of the company [Georgia Power] to work with the Commission will now pay a great benefit for rate payers,” said District 5 Commissioner Stan Wise, whose district includes Henry County.
“Thanks to this Commission’s foresight and the willingness of Georgia Power to go ahead and implement this reduction, consumers will reap the benefits,” added District 3 Commissioner Chuck Eaton, whose district encompasses Clayton County.
Georgia Power’s projections revealed $3 billion in total projected fuel costs for the year, compared to $3.4 billion the previous year, added Boatright.
Boatright said three natural gas units at Plant McDonough were included in the projections, which have the units producing 2,520 megawatts. She said another unit to come online for commercial operations in the fall also is expected to return savings due to lower projected natural gas prices.
“With so much bad news surfacing these days, it is nice to be able to say your summer electric rates won’t be quite as high,” said Commission Chairman Tim Echols, of District 2, serving east- central Georgia. “Having a diverse energy mix that includes natural gas-fired electricity has made this possible.”
The company filed on March 30, to implement its new FCR rate effective July 1. It requested to reduction of rates by $567 million annually, which is a reduction of approximately six percent monthly for the typical residential consumer.
The reduced FCR rate could be increased, but only by Commission order, said Bill Edge, the Commission’s public information officer.
“There is a trigger mechanism that if the under-collection reached $75 million, Georgia Power could increase the rates temporarily, but the Commission would have to act to make that permanent,” said Edge. “As it stands now, unless the price of fuel goes up higher than anticipated, I don’t expect any increase for the next two years.”