Georgia Power – electricity producer Southern Co’s. (SO) biggest unit – has won state approval for a massive base rate hike over three years. Starting next month, Georgia Power bills for its 2.4 million customers will jump about $15, one of the largest rate increases in the state’s history.
The new rates approved by the Georgia Public Service Commission’s order will add about $10.76 to an average monthly residential customer bill (homeowners using about 1,000 kilowatt hours per month), beginning in January 2011. This will allow the utility to recover funds already spent on environmental projects and infrastructure upgrades.
Georgia Power will also impose an extra monthly fee on its customers (about $3.73) to recover the financing costs on funds borrowed for the construction of two new 1,100 megawatts nuclear power reactors in eastern Georgia.
Per the three-year agreement, bills will go up further in 2012 and 2013, adding another $4 per month to a typical household’s costs.
Headquartered in Atlanta, Georgia, Southern Company is the second largest generator of electricity in the nation behind Exelon Corp. (EXC), serving both regulated and competitive markets across the southeastern U.S. It is a holding company for four regulated Southern electric utilities that serve about 4.4 million customers – Georgia Power, Alabama Power, Gulf Power and Mississippi Power.
Southern Company currently retains a Zacks #3 Rank, translating into a short-term ‘Hold’ rating. We are also maintaining our long-term ‘Neutral’ recommendation on the stock.
Georgia Power is the largest of four electric utilities that make up Southern Company. It is an investor-owned, tax-paying utility that serves more than 2 million customers in all but four of Georgia’s 159 counties. Georgia Power has been providing electricity to Georgia for more than a century at rates well below the national average.
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