The Georgia Public Service Commission has announced a settlement agreement that allows Georgia Power to raise electric rates in the Peach State. The Commission approved an adjustment in Georgia Power’s rates that allows the utility to earn approximately $563 million in additional revenues in 2011.
The rate increase, which becomes effective on January 1, 2011, will result in an average increase in consumer monthly bills of $10.76. The company will be allowed a rate of return on equity of 11.15%. Any earnings above 12.25% return on equity will be shared with rate payers.
The company initially asked for a rate increase amounting to an additional $1.2 billion. The settlement cuts that request in half. Georgia Power will not be able to return to the table for another rate increase unless its rate of return falls below 10.25%.
The rate increase comes at a time when unemployment is still high among Georgians. At 10.1%, the unemployment rate in Georgia currently exceeds the national average of 9.8%.
It is difficult to determine the extent of the impact the rate increase will have on Georgia’s black population. Based on government statistics, one could conclude that blacks are relatively more vulnerable to this rate increase than the average Georgian on a whole.
According to data from the U.S. Census, the median household income for blacks is approximately $30,998 per year versus the state average of $42,433. Approximately 518,668 blacks live below the poverty level in Georgia, making up more than half of all individuals living below the poverty line in the state.
Without data on the average amount that blacks in Georgia pay for electricity, again ascertaining the impact on the black community would be especially difficult. Assuming a direct correlation with national figures, it’s likely that over half of the black population in Georgia pays between $50 to $149 a month in electric bills. The Commission’s announced increase may amount to a jump in rates of 7% to 22%.