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Georgia Power files to recover fuel costs
Georgia Power has filed for a fuel-cost-recovery increase with the state Public Service Commission (PSC) to recover higher fuel costs.
The higher costs were driven primarily by increases in worldwide demand for coal which occurred last year. The increase requested in 2008 was adjusted downward by $128 million in hopes that the rapid increase in fuel prices would soon abate. Unfortunately, prices did not decline as far or as rapidly as hoped, company officials said.
The proposed new rates will result in an increase of 6.8 percent — or about $6.98 a month per 1,000 kilowatt-hours (kWh) — and will add approximately $470 million to Georgia Power's total annual fuel-cost-recovery billings, if approved by the PSC. The new rate would be effective April 1, 2010.
The proposed $470 million annual increase in billings results from:
- An almost $900 million increase in the cost of coal generation.
- A decrease of more than $120 million in the cost of gas generation.
- A decrease of about $300 million related to lower kWh demand.
- Fuel-cost-recovery rates are set separately from base rates. The PSC allows Georgia Power to recover the cost of fuel the company has used to generate electricity. The "under-recovered" amounts represent the cost of fuel required to generate electricity for customers in the past, but which the company has not yet recovered.
Georgia Power's total under-recovered fuel cost balance is projected to be $642 million by March 31, 2010. The $642 million represents the cost of fuel that previously has been used to generate electricity but has not yet been recovered from customers.
The PSC will conduct public hearings on the fuel-cost-recovery filing Feb. 22-23 and a final decision is expected on March 11. If approved, the new fuel cost recovery rates will go into effect April 1, 2010.
Georgia Power proposes to file its next fuel case on March 1, 2011, with rates to be effective June 1, 2011.
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