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OPINION - Utility Rate Increases
Wednesday, 14 October 2009
Crawford: You’ve got a lone friend at the PSC


By Tom Crawford
tcrawford@capitolimpact.net
document.write(writeModDate("Oct. 14, 2009 1 a.m.")); POSTED  Oct. 14, 2009 1 a.m.

Starting now and for years to come, many Georgians are going to see increases every month in their electricity and natural gas bills.

A few dollars here, a few dollars there, these little increases will add up to very impressive totals for the state’s two largest utility firms: $175 million for Atlanta Gas Light and $1.6 billion for the Georgia Power Co.

That’s a lot of money coming out of the pockets of Georgia consumers. The remarkable thing is that Georgia Power and Atlanta Gas Light will get that revenue without even filing for a rate increase with the agency that supposedly regulates them, the Public Service Commission.

There was a time in the not-too-distant past when a utility firm that wanted to raise its rates first had to file an application with the PSC. The utility would be required to disclose the financial and marketing data that supported its request to raise rates. It would have to make a plausible argument that future customer demand made it necessary to build more power plants or gas pipelines.

The PSC would, in theory anyway, digest those numbers, determine a fair return on investment to the utility and a reasonable cost for its customers, and then set a rate for the company to charge. It wasn’t a perfect system, but the voters who elected PSC members at least had an indirect say in the rates they had to pay.

Those rules largely don’t apply anymore. Because of changes in the law passed by a business-friendly legislature and new rules adopted by a utility-loving PSC, there’s hardly any need for the companies to bother with the grunt work that goes into a typical rate case.

If Georgia Power or Atlanta Gas Light want to jack up their rates now, all they need do is announce to the PSC that they’re going to add a "surcharge" to their customers’ monthly bills. They can be sure that three of the five commissioners — Doug Everett, Stan Wise, and Bubba McDonald — will vote to approve the surcharge.

Commissioner Chuck Eaton sometimes straddles the fence, but often votes with the Everett-Wise-McDonald axis. The one commissioner who actually considers the impact of higher prices on recession-plagued families is Bobby Baker, who usually finds himself on the losing end of a 4-1 vote.

The PSC majority is so deeply in the hip pockets of the utilities that it has become a joke. As a commission insider once remarked, "The lobbyists spend so much time in Stan Wise’s office they ought to be paying rent."

The recent debate at the PSC on a surcharge requested by Atlanta Gas Light was typical of how things work these days.

Atlanta Gas wanted to add some new pipelines to its network but didn’t want to be bothered with the chore of filing for a rate increase. So, it asked the PSC to approve a surcharge of 95 cents a month for residential bills and $2.85 a month for business customer bills.

The PSC majority, of course, favored the surcharge, but McDonald went one step beyond. It is not fair to business customers, he said, that they should have to pay more than residential customers. He proposed an amendment to require residences and businesses to pay the same amount of $1.18 each month after the surcharge is fully phased in.

Baker pointed out that McDonald’s proposal would require a widow living on Social Security to pay the same monthly surcharge as the Walmart down the street that takes in millions of dollars a month and consumes much more natural gas.

"The customer who uses 10 therms per month is going to pay the same exact amount as the customer who uses 100,000 therms per month," Baker noted.

"Everybody’s favorite whipping boy is Walmart," Wise retorted. "As fun as it is to beat up on a Walmart or a Kmart or whoever the whipping boy is, we all have to pay."

Wise, McDonald and Everett voted for the McDonald amendment to give large business customers a price break at the expense of consumers. McDonald summed it all up with probably the most truthful statement he has ever made in four decades as a politician.

"The residential customer is gonna get it one way or the other," McDonald said.

He’s absolutely correct about that.

Tom Crawford is the editor of Capitol Impact’s Georgia Report, an Internet news service that covers government and politics in Georgia

 
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