Georgia Power is getting a rate increase, but it will be $573 million less than the utility's original request of nearly $1.5 billion over three years.
The Georgia Public Service Commission announced its approval of the agreement with Georgia Power Tuesday, which raises the average monthly residential rate by $2.19 starting Jan. 1. That will be followed by a $3.61 monthly increase on Jan. 1, 2015, and a hike of $2.96 per month on Jan. 1, 2016.
The new rate plan also raises the monthly discount for those low-income customers 62 and older who qualify from $14 to $18 per month.
The power company's profit margin is also set between 10 percent and 12 percent per year, with any earnings above 12 percent being shared with customers (two-thirds of the excess) and the company (one-third). The company has agreed to not file a general rate increase request unless its profit falls below 10 percent.
"This is an historic agreement," PSC Chairman Chuck Eaton said in a statement. "This agreement protects our most vulnerable citizens while keeping electric rates just and reasonable."
Georgia Power filed its initial rate request in June, seeking $482 million per year, to cover money spent on past and future infrastructure improvements. That includes pollution controls, power generation costs, transmission and distribution, and smart-grid technology.
The PSC held public hearings in October and November, with the final decision coming Tuesday.
The rate increase drew fire from the senior-citizen group, AARP, with the organization's Georgia President Barry Reid calling it "just too much" for residents still feeling ill financial effects from the Great Recession. He said too many people 50 years old and above are unemployed, living in poverty and going hungry.
"This is not the time to add to Georgia Power's swollen profits," Reid said in November.
PSC Vice Chairman Doug Everett responded Tuesday, questioning AARP's objections in light of the increase of the low-income, senior citizen discount.
Georgia Power, a subsidiary of Atlanta-based Southern Co., serves 2.4 million customers throughout the state. It operates in all but four Georgia counties.
Southern Co. reported third-quarter earnings, or profit, of $852 million, down from $976 million in the July-September period of 2012. Through the first nine months of this year, its profit is $1.23 billion, down from $1.97 billion the same nine months of last year.