Georgia Power hikes prompt legislation to restore consumer advocate for PSC electricity rate cases

Georgia Power sign at Plant McDonough-Atkinson in Cobb County accompanying article about restory powerGeorgia Power sign at Plant McDonough-Atkinson in Cobb County (photo by Larry Felton Johnson)

by Stanley Dunlap, Georgia Recorder [This article first appeared in the Georgia Recorder, republished with permission]


February 26, 2024

Two House and Senate Legislative committees have unanimously backed proposals that would shift the responsibilities of Georgia’s utilities regulators.

The Senate Regulated Industries Committee passed Senate Bill 457 late last week, which would create a consumer’s utility counsel to advocate for the public in electric rate cases. Earlier in the week, a House Energy, Utilities and Telecommunications Committee passed a proposal to place the Public Service Commission in charge of private water companies.

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Both bills now head before their respective Rules Committees that determine which bills go before the full chambers.

Republican Sen. Chuck Hufstetler said he filed SB 457 in response to the PSC recently signing off on Georgia Power’s multiple utility bill increases due to increased electricity base rates, overrun costs associated with building the Vogtle nuclear power plant units, coal ash cleanup and other expenses.

The PSC regulates Georgia Power and a number of other public utilities that provide electricity, natural gas, and telecommunications services. The PSC has limited authority over the more than 90 Electric Membership Cooperatives and municipal gas and electric companies located throughout Georgia.

Hufstetler said that while the elected five-member Public Service Commission is responsible for considering public interests when making utility decisions, SB 457 establishes an independent director to ensure that regulators are getting more robust information before deciding on electricity rate cases and other proceedings affecting customers.

“They would have legal standing on behalf of the consumer, and we would join 46 other states, including all those around us, in having someone who advocates for this cause,” Hufstetler said during Thursday’s Regulated Industries Committee meeting. “Of course, it would be subject to budgetary appropriations, but it would be pretty minimal cost.”

The legislation would restore a consumer utility counsel that was shut down in 2008 by Gov. Sonny Perdue while the state was in the midst of a budget crisis caused by the recession.

The Savannah Morning News reported in September 2008 that the five-member commission would review roughly 25,000 complaints within a year and would take legal action against utility companies on behalf of the public.

The PSC’s Executive Director Reece McAlister said that there isn’t a need to reestablish an Office of the Consumers’ Utility Counsel since there is currently a PSC public interest advocacy staff that represents residential, small commercial and industrial groups in utility cases.

The public interest advocacy staff, which is employed by the PSC, will cross examine witnesses, have its own expert witnesses testify in cases and make recommendations to the PSC on behalf of customers.

Creating the new utility consumer advocate would be a duplication of what already exists, McAlister said.

“Even today many consumers are at odds with each other that may be in the residential market,” he said during a Feb. 14 committee hearing on the measure. “Nonprofit consumer groups who represent ratepayers in front of the PSC find themselves with competing interests. For example, clean energy is not always the cheapest or the most reliable, and sometimes the financial needs of a large house with solar panels on the roof could be in direct opposition to the needs of a smaller house with a family on a modest income.”

Georgia Conservation Voters lobbyist Doug Teper said the consumer utility council once played an important role in representing the public in cases that affected their pocketbooks.

“For example, if you were a major industrial group, you would pay a different rate per kilowatt hour than residential does,” Teper said at the committee hearing. “Each group would quite often have one of the top Atlanta law firms to go cut a deal. It was very important that residents had somebody who was representing their interests.”

Concerns raised by private water companies’ high bills

A House Energy, Utilities and Telecommunications Committee voted in favor of Greensboro Rep. Trey Rhodes’ HB 1220, which gives the Public Service Commission oversight of Georgia’s private water companies with more than 1,000 customers.

The unanimous decision to move HB 1220 ahead to the House Rules Committee came after the panel heard testimony from a Greensboro resident, business owner, and Greene County commissioner about how their water and sewer bills from their unregulated private water company are significantly higher than the typical water bills.

Jacob Fried, a resident of Greene County, said that Piedmont Water Company’s high water and sewer costs for his two Putnam County businesses and the ongoing legal battles have forced him into bankruptcy.

Fried said that Piedmont’s rates for water will have increased by 30% and sewer by 20% over a three year period once the latest hikes kick in.

Fried testified last week that he spent about $80,000 hooking up the water and sewer lines at the Eatonton car wash he opened two years ago. Since then, the average monthly water bill for the car wash has been $7,000, compared to a national average of $3,000 for car washes.

And a few months after opening the car wash, Piedmont would inform Fried that he owed the water company an additional $100,000 in impact fees because the car wash was using more water than he had estimated.

“There’s no option B for small business owners,” he said. “There’s a private water system that’s unregulated and able to charge whatever they want to charge. I’m here begging you to do something about this and do something for our community.”

Piedmont Water Company founder and chairman Jerry Shaifer said the company charges fair rates to its customers in 14 counties in the state.

The company has spent $20 million to build a water treatment plant that serves 5,000 customers in Greene County and has made other significant capital investments, he said.

“We currently run our pricing through a regulatory model anyway, frankly, because we always assumed that this would happen so we’ve been preparing for that day,” Shaifer said.

In Georgia, more than 560 water systems are operated by several dozen private water companies.

Tom Bond, director of utilities at the PSC, said the commission is agnostic about taking over water companies.

The PSC would need time to develop rules and to get budgetary resources from the state to take on this new role before it could begin regulating water utilities, Bond said.

Bond said the PSC would need to find out how many of the private water companies have at least 1,000 customers and it would need the authority to set terms and conditions, such as when a company can disconnect a customer.

According to the bill, the PSC would have the same powers as state regulators with regard to natural gas and other utilities.

Georgia Recorder is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Georgia Recorder maintains editorial independence. Contact Editor John McCosh for questions: info@georgiarecorder.com. Follow Georgia Recorder on Facebook and Twitter.

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