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In a surprise move, Georgia’s largest electric company is asking to temporarily freeze rates, though customer bills could still go up next year.
The proposal could bring welcome relief for Georgia Power customers who have experienced multiple bill increases, but some advocates said it also raises serious concerns.
Georgia Power bills have gone up six times in the last three years to pay for the company’s operations and profits, the construction of new nuclear reactors and high fuel costs.
Many observers expected another rate hike this year following a trial-like proceeding before the Georgia Public Service Commission known as a rate case. Rate cases typically happen every three years; the next was expected to begin in July.
But now, under a proposed agreement between Georgia Power and the Georgia Public Service Commission’s staff announced Monday, the company plans to freeze the base rate that makes up a substantial portion of customers’ monthly power bills through 2028.
That doesn’t mean there’d be no increases to bills. Next year, the utility would submit its plan to pass the costs of cleaning up from Hurricane Helene on to customers. The commission would hold full hearings on that issue. The utility could also ask for increases on bills to cover costs for natural gas, coal and other sources of fuel.
In a statement, PSC chair Jason Shaw called the proposal “nothing but good news for Georgia Power ratepayers.”
“Energy customers have seen unprecedented inflation in the energy sector across the U.S.,” Shaw wrote. “My fellow Commissioners and I urged staff and Georgia Power to come to some agreement where base rates would not increase.”
Georgia Power says it can freeze rates thanks to “extraordinary economic growth” in the state – something the utility has been pointing to since it made an emergency request in late 2023 to generate more power in response to business and manufacturing demand.
That request drew criticism because much of the additional power included in it comes from fossil fuels, which produce the greenhouse gases that worsen climate change. But many advocates and public commenters also worried that ordinary residential and small business customers would end up footing the bill.
Georgia Power officials repeatedly said that wouldn’t be the case. The influx of data centers and factories to the state is also bringing an influx of revenue to the utility, which the company has said would cover the costs of upgrades to serve those new customers and put “downward pressure” on rates for everyone else.
“The company has been talking about how having this unprecedented growth in the state would allow them to spread the costs of the system across these larger load customers,” said Liz Coyle, executive director of the consumer advocacy organization Georgia Watch. “What I would have preferred is the company to file a rate case that actually proposed lowering power bills.”
As part of the deal to allow more power generation struck last year following the company’s emergency request, Georgia Power promised downward pressure of at least $2.89 per month for the typical customer. It’s unclear how, if at all, that figure factors into the current proposal to freeze rates.
“It appears that [commission] staff and Georgia Power have agreed that keeping rates steady where they are now meets the promises that Georgia Power has agreed to,” said Jennifer Whitfield, a senior attorney at the Southern Environmental Law Center. “The problem is we can’t know if that’s the case because we have no documents, we have no financial disclosure to evaluate to determine whether that’s the case.”
Singling out the Hurricane Helene costs also gave Whitfield pause. The storm is the most expensive in the utility’s history, so far estimated to cost over $1 billion, so hearings to pass on those costs will almost certainly result in higher bills.
That wouldn’t necessarily be true, Whitfield argued, if the storm costs were instead part of a broader rate case.
“If we segment out just one issue, we lose the ability to focus on the issues where customers might get some relief as well,” she said.
The proposal to freeze rates comes as the public service commission considers Georgia Power’s long-term power plan and as two commissioners are up for election for the first time since 2020.
Public service commission elections were canceled for two cycles while a legal challenge to the voting system worked its way through the courts.
Three commissioners who were due to face voters during that time did not, and instead continue to serve on the commission and vote on important issues like Georgia Power’s plans and, now, the proposed rate freeze.
While it’s not unusual for important issues before the commission to coincide with election years, Coyle acknowledged that those running this year – Tim Echols and Fitz Johnson – “might find it a little easier to not be in the midst of a heated rate case while talking to the voters.”
But, Coyle said, the proposed three-year freeze won’t erase the other recent rate hikes.
“The voters can and should be aware – they certainly are aware their power bills are already high,” Coyle said. “They’ll still be high the next three years.”
The commission will hold hearings on the new rate freeze proposal before voting on whether to deny, change or approve it.