OVERVIEW
The Consumers’ Utility Counsel Division (“CUC”) of the Governor’s Office of Consumer Affairs (“OCA”) represents Georgia’s residential and small business* ratepayers in utility proceedings before the Georgia Public Service Commission (“PSC” or “Commission”). CUC appears on behalf of these ratepayers in a wide variety of matters, including matters involving utility rates and services and rulemaking proceedings.
During 2007, CUC appeared and/or participated in a variety of cases involving electric, gas and telecommunications matters. Appendix “A” contains a detailed listing of the major cases in which CUC participated. These cases include, but are not limited to a rate case filed by Georgia Power Company; Atlanta Gas Light Company’s Capacity Supply Plan; the appeals filed by the City of Monroe and by SP Newsprint as a result of Commission decisions; and numerous other electric, gas and telecommunications territorial dispute cases.
*The small business ratepayers represented by CUC are businesses with ten or fewer employees and $100,000 or less in annual net (after-tax) revenues pursuant to O.C.G.A. § 46-10-2.
ELECTRIC CASES
A. Georgia Power Company: 2007 Rate Case
During June 2007, Georgia Power Company (“Georgia Power” or “GPC”) filed a rate case seeking to receive an additional $1.6 billion in rates over the three year period including 2008, 2009 and 2010. The additional $1.6 billion was comprised, in large part, of a proposed 125 basis point increase in GPC’s allowed return on equity (“ROE”), from 11.25% to 12.5%, and on expenses that GPC expects to incur during that time in connection with environmental compliance measures. Georgia Power proposed that the requested increase be divided proportionately among all classes of ratepayers. However, a number of commercial and industrial entities disagreed with a proportional allocation, and requested instead that the Public Service Commission (“PSC” or “the Commission”) require residential ratepayers to pay a disproportionately high percentage of the ultimate increase. CUC opposed both the amount of the requested increase and a disproportionate allocation. After a lengthy hearing, during which CUC cross examined in connection with the proposed increase and offered expert testimony in opposition to a disproportionate allocation, a stipulation of settlement was entered into by GPC, the PSC advocacy staff, CUC and several intervenors.
Under the settlement, which was adopted and implemented by the Commission, Georgia Power will receive an additional $966 million (approximately $600 million less than requested) in rates and environmental costs during the three year period of 2008, 2009 and 2010. Contrary to the position urged by a number of intervenors, the additional $966 million will be allocated proportionately among ratepayer classes, so that the residential ratepayers represented by CUC will not pay a disproportionately large amount of that increase.
B. Georgia Power Company Integrated Resource Plan
During January 2007, Georgia Power filed its 2007 Integrated Resource Plan (“IRP”) which detailed the manner in which the company proposes to meet forecasted energy needs over the next twenty years. The issues in the 2007 IRP were broken into two dockets, both of which were resolved through stipulations between GPC, Commission staff and various other parties. Under the stipulations:
- Five new Demand-Side Management (“DSM”) projects were added as pilot programs;
- The Commission certified the GPC’s Power Credit Single Family DSM program.
- Georgia Power is ordered to work with Staff, CUC and other interested parties to develop a timetable and action plan for the development of additional renewable resources to meet new capacity requirements;
- Georgia Power will issue a Request for Proposals (“RFP”) for base load resource needs identified in the IRP for the 2016 to 2017 time frame.
- Georgia Power will continue investigating self-build nuclear power opportunities and must develop a backup plan to ensure there are no delays in acquiring the next best alternative in the event that the nuclear option is not viable.
- Staff was directed to issue a Notice of Proposed Rulemaking (“NOPR”) proposing revisions to PSC Rules that require the Company to report on its compliance with the 1990 Clean Air Act.
- Before negotiating wholesale power sales to new or existing wholesale customers Georgia Power must:
- Notify the Commission of its intent to negotiate; and
- Provide a written analysis demonstrating any impact that the decision to sell at wholesale may have on retail ratepayers.
- Georgia Power was ordered to apply for national certification of its Green Energy Program.
- A target reserve margin for the 2007–2010 timeframe was set at 13.5%, with 15% to be used for the remainder of the study period.
In addition, GPC’s application for certification of certain power producing units was approved. Some conditions were placed in connection with the sale of power from one of the newly certified units, including the Commission’s retention of a right of first refusal to a 415 MegaWatt block of capacity from that unit. GPC’s proposed natural gas pipeline to supply those units was also approved and two existing units were retired and decertified.
C. Georgia Power Company Application for Certification of Purchase Power Agreements with Exelon Generating Company, LLC from the Heard
On April 17, 2007, Georgia Power filed an application seeking certification of three Purchase Power Agreements (“PPAs”): the Exelon PPA (Tenaska), the Dahlberg PPA (Southern Power), and the Wansley PPA (Southern Power), together with an “additional sum” to be paid to the Company of $14.88 per kW-year. Under O.C.G.A. § 46-3A-8, GPC is allowed to earn an additional sum above the “actual or certificated costs, whichever is less,” incurred for each PPA, to “encourage” the Company’s entering into “certificated long-term power purchase[s].” The additional sum represents the difference in terms of dollars that would have otherwise been saved and flowed through to ratepayers from purchase power agreements that were less costly than the Company’s self-generation.
CUC felt that the amount requested as an additional sum was excessive, and cross examined the Company extensively on that issue. Ultimately, the company agreed to accept a greatly reduced additional sum, which resulted in $125 million per year in savings to ratepayers.
D. SP Newsprint Company v. The Altamaha Electric Membership Corporation
On or about May 2007, SP Newsprint Company (“SPN”) filed a petition with the PSC alleging that SPN’s power provider, Altamaha Electric Membership Corporation (“Altamaha”), was charging it unreasonably discriminatory rates and was not providing it with dependable service. SPN asked the Commission to order Altamaha to stop discriminating against SPN, to find that Altamaha had violated the Territorial Act that requires power companies to provide adequate and dependable service, and also to order SPN’s electric utility service to be transferred to Georgia Power or another electricity retailer whose power supply rates, resources, terms and conditions were as favorable to SPN as Georgia Power’s then most favorable power supply, rates, resources, terms and conditions.
CUC opposed SPN’s request, and cautioned against any transfers of service without the Commission’s having afforded Altamaha the opportunity to correct the discrimination as required by statute. CUC was concerned because, among other things, no assessments had been done on the impact that requiring Georgia Power to serve SPN could have on GPC’s now and future ability to plan to meet the needs of its customers.
The Commission did not grant SPN’s request and dismissed the complaint without prejudice. SPN filed an appeal seeking judicial review in Fulton County Superior Court. That appeal is still pending.
NATURAL GAS CASES
A. Atlanta Gas Light Company’s 2007-2010 Gas Supply Plan
July 2, 2007, Atlanta Gas Light Company (“AGL”) filed its 2007-2010 Capacity Supply Plan (“Plan”), (similar to GPC’s integrated resource plan) in which it projected its capacity supply needs for the next three years. AGL requested additional capacity for the AGL system, along with diversity of supply, to enable it to handle possible worse-case scenarios (supply shortages from hurricanes, higher prices due to greater competition with electric utilities for finite supplies, etc.). It also requested that the Commission approve its plan to release excess capacity to marketers and that the Commission approve the sale of an integral piece of intrastate pipeline from AGL to its newly created affiliate, Magnolia Enterprises (“Magnolia”). This transfer and sale would result in reversion of this pipeline to interstate commerce and Federal Energy Regulatory Commission (“FERC”) jurisdiction.
CUC participated in industry meetings and hearings in connection with this matter. Based on a variety of factors, CUC objected to the plan as filed. Although the PSC advocacy staff also expressed concerns, a number of marketers approved the AGL plan and entered into a stipulation with AGL. Despite the AGL/Marketer stipulation (which would have approved AGL’s plan in full), and due to the objections raised by CUC, PSC Staff and one gas marketer, the Commission modified the plan instead of approving it as proposed.
B. Complaint of Atlanta Gas Light Co. against City of Cartersville for Unreasonably Interfering with the Company’s Gas Distribution System in Bartow County, GA.
On September 22, 2006, AGL filed a complaint with the Commission against the City of
The Commission assigned this matter to a hearing officer, and a hearing was held. The hearing officer then submitted a Recommended Order to the Commission in which he found that Cartersville unreasonably interfered with AGL’s pipeline and distribution system when it extended its gas lines and that Cartersville’s administrative process was used to unreasonably interfere with AGL’s system. The Recommended Order also ordered that the City transfer certain of its gas facilities to AGL, so that the Company could then serve the area in question.
CUC Staff and the City disagreed with the Recommended Order and filed exceptions to same. The matter is still pending before the Commission.
C. Atmos Energy Corporation 2007-2008 Gas Supply Plan
On July 2, 2007, Atmos Energy (“Atmos” or “Company”) filed its 2007-2008 Gas Supply Plan (“GSP”). Thereafter, Atmos filed rebuttal testimony accepting all but three of Staff’s proposed changes to the Company’s GSP. On September 18, 2007, a hearing was held and briefs were filed September 24, 2007.
Based on the evidence presented, CUC supported Staff’s recommendations on the three contested issues: the appropriate methodology to determine the required capacity, the amount of firm transportation, and the performance based rates (“PBR”) sharing mechanism. On October 2, 2007, the Commission adopted Staff’s proposed order by unanimous vote.
D. Gas Certificate Applications for Certificate of Public Convenience & Necessity for Gas Certificate Application:
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As a result of two highly contested cases involving municipal gas operations outside of a City’s home county (AGL v. City of Buford and AGL v. City of Monroe), six cities voluntarily filed applications with the Commission seeking certification of their respective natural gas distribution systems located outside of their respective home counties. The cities involved include: Byron, Madison, Statesboro, Summerville, Toccoa and Winder. Each city sought a certificate to serve in counties where its gas operations had already been extended. The City of
The Commission assigned a Hearing Officer for each case. In four cases (Byron, Madison, Toccoa and Statesboro), the parties entered joint stipulations to settle the matter. In the remaining cases (Summerville and Winder), the Cities and AGL are trying to negotiate an agreed upon boundary acceptable to all parties. CUC participated in each hearing and/or negotiation to ensure inter alia, that residential and small businesses consumers residing outside of each respective City’s home county have been and will continue to be charged the same rates as those consumers residing inside a City and/or its home county.
TELECOMMUNICATIONS CASES
A. In the matter of Buzz Telecom, Business Options, Inc., UMCC Holdings, Inc. and Ultimate Medium Communications Corporation: Allegation of Violation(s) of Georgia Public Service Commission Rules and the Telecommunications Marketing Act of 1998
Buzz Telecom (“Buzz”) was a long distance telephone company certificated to sell long distance service to
CUC worked with Commission Staff as well as other State Consumer Advocates (through NASUCA) to investigate and share information learned. After completing its investigation, CUC filed comments requesting that the Commission revoke Buzz Telecom’s certificate because of the Company’s illegal and deceptive actions against
B. In the Matter of Generic Study to Review Cost Studies, Methodologies, Pricing Policies, and Cost-Based Rates for Interconnection and Unbundling for BellSouth’s Telecommunications, Inc.’s Network
On April 6, 2004, the U.S. District Court for the Northern District of Georgia (affirmed by the Eleventh Circuit) ruled that BellSouth Telecommunications, Inc. (“BellSouth”) must be made “whole” with regard to the network element rates that the court found to have been confiscatory. On March 2, 2006, the Commission determined by Letter Order that part of making BellSouth “whole” included interest on outstanding differences owed by Competitive Local Exchange Carriers (CLECs) between the old and new rates established by the Commission, at a rate of seven percent (7%) per annum applied to the principal balance. In a follow-up Order, the Commission determined that making BellSouth “whole” further included the payment of pre-judgment interest. The Commission then determined that an evidentiary hearing on the appropriate rate for pre-judgment interest was necessary.
CUC participated in the hearings on pre-judgment interest and submitted a post-hearing brief based on the evidence in support of 2.41% as the appropriate amount of pre-judgment interest to be imposed upon CLECs as a result of the Remand Order. The Commission held that the pre-judgment interest due in order to make Bell South “whole” within the meaning of the Northern District’s order was 2.8%.
ALL UTILITIES
IN RE: GPSC Rulemaking Regarding Revisions of Commission Utility Rule 515-2-1-.14 Open Hearing Process
On March 9, 2007, the Commission issued a Notice of Proposed Rulemaking (“NOPR”) proposing to restrict ex parte communications with Commissioners (between one party and a Commissioner(s) without the others having had the benefit of such communications) on any matters that are part of a contested case. Pursuant to the proposed rule, Commissioners would have been prohibited from having any ex parte communications regarding those cases, thus ensuring that all information shared would be done so in an open and transparent manner and with all parties having the benefit of such information as well as the opportunity to respond. The proposed rule specifically provided for an emergency exception where, due to public health, welfare and safety, the notice requirements could not otherwise be satisfied. The rule also provided for a cure for inadvertent ex parte communications.
CUC strongly supported the rule as proposed and suggested only a few, minor changes for clarity. Unfortunately, after three rounds of NOPRs and comments, the Commission enacted a less stringent version of the original rule, allowing ex parte communications until the record is closed.