By the OGJ Online Staff
HOUSTON, June 29 -- Georgia Power Co., a unit of Southern Co., Atlanta, said it is seeking a 7.5% rate increase spread over 5 years to help finance construction of new transmission lines and pollution control equipment.
The company asked for a 1.5%/year increase to cover the cost of purchased power or of building new generating capacity. It also asked Georgia regulators to raise its authorized return on equity to 11-13.5% from the existing range of 10-12.5%.
The company said it will build 5,000 Mw of generation and expects to spend $1.4 billion on 300 miles of transmission lines, plus $875 million on pollution control devices. Capital expenditures in 2001 are projected to be about $1.6 billion. Georgia Power said the capital costs need to be added to its rate base.
The plan filed with the Georgia Public Service Commission Friday includes various alternative proposals. Georgia Power said it was required to file a rate case by July 1 based on costs during a 1-year test period. The filing calls for a 2.3% rate increase of about $103 million.
Georgia Power said it also filed an alternative proposal, which waives the proposed increase in favor of other measures in the proposed 5-year plan. The company said it asked to continue operating within an earnings band, as it has for the last 6 years but is requesting to raise its return on equity to 11-13.5%.
Under the new proposal, customers would be allowed to keep two-thirds of any earnings above the earnings range that can be attributed to hot weather, while the company would keep one third. If there are any other earnings above the range, including those attributable to the company's cost management program, the company would receive half and the customers half.
Georgia Power also proposed a certified capacity cost recovery tariff effective June 1, 2002 to recover the cost of building new power plants or of buying electricity. It said the first year increase will be about $30 million or 0.7%, less than the increase required by a test-year case.
The company noted it has not had a base rate increase since 1991 and customers received a $262 million rate reduction in 1998 and another $24 million reduction in 1999.