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Georgia Power boss defends rate hike

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POSTED: January 11, 2011 9:20 a.m.

ATLANTA — Georgia Power’s new president said last week that the electric utility had to raise prices to meet stricter emissions rules and maintain its system, but he’s considering new ways to help customers cut costs.
W. Paul Bowers, 54, became president and CEO of the largest subsidiary in the Atlanta-based Southern Co.’s network on Dec. 31, just as its customers were hit with a rate increase that will add more than $14 to the monthly power bill for an average home.
Raising prices was necessary to comply with stricter environmental rules on coal-fired power plants, build a new gas-fired plant and maintain the company’s transmission network, Bowers said.
Critics assailed Bowers’ company for raising rates during an economic downturn that pushed unemployment to 10.1 percent, although Bowers said his firm invested billions of dollars in its business even in a sour economy.
“We didn’t stop it because our customers expect the lights to stay on, they expect us to be compliant with environmental law and they want us to have power for the growth of the future,” Bowers said.
Last month, Georgia’s utility regulators at the Public Service Commission approved a settlement that not only hiked bills, but also gave Bowers’ company the ability to more quickly raise prices should its earnings fall below set targets. Normally, Georgia Power must file a new case with the commission to raise rates, a process that takes months, involves testimony, analysts and a greater say for critics.
Outgoing PSC commissioner Robert Baker voted against the settlement, saying it gave the utility too much. The Georgia chapter of the AARP wanted it rejected for raising customer costs by hundreds of millions of dollars more than necessary during one of the worst economies in a generation.
When asked, Bowers said he could not rule out another price increase before the current settlement expires at the start of 2014, particularly if Georgia suffers another deep recession.
“I hope not,” Bowers said. “You know, you never know.”
Georgia Power sought permission in July to more rapidly change its prices after weathering a drop in electricity usage and revenue during the Great Recession. Bowers said he watched as the Southern Co.’s power system went from adding up to 70,000 new customers annually to a net growth of less than 100 new customers in 2009.
“That made us step back and say, ‘Is the three-year rate plan process the right process, and is there a way that we can adjust during these ups and downs in the economy?’” said Bowers, formerly Southern Co.’s chief financial officer.
Bowers said his goals include giving customers more control over their electricity bills. For example, Bowers said Georgia Power is researching whether customers are willing to install systems that automatically turn off major appliances such as air conditioners when electricity costs peak, typically in the early evening.

 

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