Sunday, July 4, 2010

Georgia Power Seeks Cost Recovery of Investments in Cleaner Generation, Smart Grid and Environmental Controls

PRNewswire -- Georgia Power on July 1 asked the Georgia Public Service Commission (PSC) for permission to increase its base rates approximately $615 million, or 8.2 percent of the company's retail rates, to recover the costs of investments in cleaner generation sources, power lines, smart grid technologies, environmental controls and energy efficiency programs to meet current and future customer demand.

The proposed change in rates would be effective Jan. 1, 2011.

"Georgia is the fourth-fastest growing state in the nation, and we have invested billions of dollars to serve that growth," said Ann Daiss, Georgia Power vice president, comptroller and chief accounting officer. "We must continue to invest in our infrastructure to maintain the reliable, affordable electricity and high level of customer satisfaction that our customers deserve and expect."

If the request is approved, the typical residential customer using 1,000 kilowatt-hours per month would see an increase of about 10.1 percent, or $10.88. For business customers, the average increase would range from about 7.7 percent to 10.3 percent.

Additional increases, if approved, would become effective in subsequent years through existing and newly proposed cost-recovery mechanisms outlined in the filing. The company currently estimates increases for new generation, environmental controls and demand-side management programs are expected to increase the typical residential customer bill per month by about $5.38 in 2012 and $1.42 in 2013, respectively. These estimates will be updated through future filings with the PSC.

As of December 2009, the company's rates were approximately 14 percent below the national average and 7 percent below the Southeast average. Even with this proposed increase, Georgia Power's rates should remain below the national average, and its customers will be paying lower base rates today than they were in 1991 on an inflation-adjusted basis.

Since the last base-rate case in 2007, Georgia Power has invested almost $5 billion:

-- In reliability and Smart Grid - To ensure a stable and efficient grid,
and reliable service for customers.
-- In cleaner natural gas generation - To ensure adequate and cleaner
energy when customers need it. Plant McDonough Units 4, 5 and 6 are
scheduled to begin serving customers in January 2012, May 2012 and
January 2013.
-- For a cleaner environment - To continue to reduce emissions and meet
federal and state environmental standards. By 2015, the company
anticipates reducing nitrogen oxide emissions by 85 percent and sulfur
dioxide emissions by 95 percent from 1990 levels, and achieving
significant reductions in other emissions.

Georgia Power also is proposing changes to its current accounting order with the PSC that would:

-- Replace large rate changes with smaller, periodic adjustments.
-- Allow customers to benefit from cost controls and proactive management
on a timelier basis.
-- Allow customers to share in unexpected economic and/or weather
-- Support a more timely process for review of both past and projected
costs than the current lengthy and complex filings.
-- Help maintain the financial stability of the company and keep
financing costs low.

In addition, the company's plan features new energy-efficiency programs that will help customers control their energy use and save money. It also includes a new electric vehicle rate that encourages customers to charge at lower-cost, off-peak times and pay less for electricity.

The PSC will hold public hearings October through December. A final decision is expected Dec. 21, 2010, with new rates going into effect Jan. 1, 2011.

Georgia Power is the largest subsidiary of Southern Company, one of the nation's largest generators of electricity. The company is an investor-owned, tax-paying utility that serves 2.3 million customers and has operations in all but four of Georgia's 159 counties.

Cautionary Notice Regarding Forward-Looking Statements

This press release includes forward-looking statements regarding Georgia Power's filing with the Georgia PSC to increase retail base rates, implement new base rate tariffs, and modify existing base rate tariffs. There are various factors that could cause actual results to differ materially from those suggested by the forward-looking statements; accordingly, there can be no assurance that such indicated results will be realized. These factors include: state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery and the Georgia PSC's review of Georgia Power's 2010 base rate case filing (the final outcome of which may differ materially from Georgia Power's proposal); the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, environmental laws including regulation of water quality, coal combustion byproducts, and emissions of sulfur, nitrogen, carbon, soot, particulate matter, hazardous air pollutants, including mercury, and other substances, and also changes in tax and other laws and regulations to which Georgia Power is subject, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings or inquiries, including the pending Environmental Protection Agency civil actions against Georgia Power, Federal Energy Regulatory Commission matters, and Internal Revenue Service audits; the effects, extent and timing of the entry of additional competition in the markets in which Georgia Power operates; variations in the demand for electricity, including those related to weather, the general economy and recovery from the recent recession, population and business growth (and declines), and the effect of energy conservation measures; available sources and costs of fuel; effects of inflation; ability to control costs and avoid cost overruns during the development and construction of facilities; investment performance of Georgia Power's employee benefit plans and nuclear decommissioning trusts; advances in technology; potential Department of Energy loan guarantees related to the potential Plant Vogtle expansion; internal restructuring or other restructuring options that may be pursued; the ability of counterparties of Georgia Power to make payments as and when due and to perform as required; the ability to obtain new short- and long-term contracts with wholesale customers; the direct or indirect effect on the business of Georgia Power resulting from terrorist incidents and the threat of terrorist incidents; interest rate fluctuations and financial market conditions and the results of financing efforts, and the credit ratings of Georgia Power; the ability of Georgia Power to obtain additional generating capacity at competitive prices; catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, pandemic health events, such as influenzas, or other similar occurrences; the direct or indirect effects on the business of Georgia Power resulting from incidents affecting the U.S. electric grid or operation of generating resources; the effect of accounting pronouncements issued periodically by standard setting bodies; and other factors discussed in reports filed by Georgia Power from time to time with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended Dec. 31, 2009. Georgia Power expressly disclaims any obligation to update these forward looking statements.

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