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Case could cut Georgia Power bills

POSTED: November 17, 2007 5:01 a.m.
Hinesville, other Georgia cities and the municipal association can expect a court ruling by Nov. 15 in a case that could cost city customers $50 million in power bills.
The Fulton Superior Court case is an appeal of the Public Service Commission’s decision last year to remove part of franchise fees collected by cities from Georgia Power for use of city rights-of-way from the rate base and to add them as a surcharge onto municipal customer bills.
GMA, a dozen cities, including the consolidated governments of Athens-Clarke, Columbus-Muscogee, and Augusta-Richmond, as well as industrial and charitable concerns appealed the PSC’s decision on the grounds that it was an arbitrary and capricious action that discriminated against municipal Georgia Power customers. GMA argued that the PSC made its decision without any evidence.
The PSC decision on appeal was rendered in a petition brought by Cobb County and Association of County Commissioners of Georgia in which they claimed franchise fees only benefited municipal residents. ACCG’s petition was called ironic when testimony at the PSC hearing indicated that they publicly advocate for the legal authority to demand compensation from Georgia Power and other utilities for the use of county rights-of-way.
A decision this year by the Georgia Public Service Commission will result in a jump in electric bills of somewhere between $50 million and $55 million a year for Georgia Power customers who live in cities. But customers living in unincorporated areas would see their bills decrease.
The disagreement centers on how Georgia Power pays franchise fees for using the right-of-way property owned by cities in order to run power lines. The cost of the fees are passed on to ratepayers.
Georgia Power pays up to 4 percent of the amount it makes from selling electricity in cities in exchange for using the land.
Through the agreements, cities receive $110 million a year from the fees, which are not necessarily earmarked for maintaining the rights-of-way but instead go into their general budgets.
“It’s basically a revenue producer for the municipalities,” said Alex Sponseller, an assistant attorney general for the state representing the PSC in the case.
He pointed out that county governments cannot collect franchise fees under state law, but county residents still contributed 45 percent of the funds through their monthly bills.
All Georgia Power customers, regardless of where they live, have been paying for the 4 percent fees as part of their electric rates.
But the PSC’s ruling phased out part of those charges so that by 2009, only 2 percent of the fees would come out of everyone’s bill, while the other 2 percent would be borne solely by customers residing in municipalities.
 

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