Energy Update – July 2025

GAM is constantly engaged on energy regulatory matters before the Georgia Public Service Commission (“Commission”), representing our members’ interests in highly complex cases that impact the affordability and reliability of energy used by Georgia manufacturers.

In the last few weeks, GAM has diligently worked to achieve resolution with regard to two significant matters: (1) the 2025 Georgia Power Company (“Georgia Power”) Integrated Resource Plan (“IRP”); and (2) agreeing to a base rate “freeze” (with exceptions as described herein) for the next three years, providing base rate stability and predictability until 2029.  These two settlements, both agreed to by GAM, Georgia Power, and the Commission Staff, provide substantial benefits to GAM members.

 

2025 Georgia Power Integrated Resource Plan

The 2025 Georgia Power IRP was filed on January 31, 2025.  GAM previously distributed a summary of the initial filing on February 4.  If you need another copy of the February 4 memorandum, please email Clay Jones at cjones@gamfg.org.

GAM intervened in the docket and participated in three rounds of hearings over the past six months.  GAM continually communicated with Georgia Power, Commission Staff and other friendly interveners (there were approximately 25 intervening parties in the IRP case) to advocate for settlement of the case.  GAM signed on to a settlement with Georgia Power, the Commission Staff, and other interested parties that substantially reflects GAM’s positions and views on integrated resource planning.  On July 15, the Commission approved the proposed settlement.

The IRP settlement is a win for GAM members, adopting an “all of the above” approach to generation to address significant system load growth.  The highlights of the settlement are:

• Periodic review and update of load forecast assumptions to ensure more accurate projections driven by the increase in large-scale data centers locating in Georgia.
• Extended operation of units at Plant Scherer and Bowen beyond 2028 and 2035, respectively. The plants could continue to operate, co-firing with natural gas, until 2038.
• Approval of capacity upgrades at Plant McIntosh to add an additional 268 MW of natural gas capacity.
• Uprating of Plant Vogtle Units 1-2 to generate an additional 54 MW of capacity.
• Approval to modernize most of the hydroelectric units Georgia Power sought to modernize, adding more capacity value.
• Extended operation of Plant Gaston Units 1-4 and A beyond December 31, 2028.
• Continued RFPs conducted through competitive solicitations to determine the most reliable and affordable options, including up to 4,000 MW in renewable energy by 2035.
• Approval of improvements to the Company’s CARES program, including the option to procure from customer-identified renewable resources, as well as the ability of multiple customers to bring forward a single resource.
• Reduction of Georgia Power’s “additional sum” requests from $4.00 to $3.00 per kilowatt for new demand response and distributed energy programs, and from $4.00 to $3.50 per kilowatt-year for capacity obtained via utility scale and distributed generation RFPs.
• No adoption of utility-run, mandated demand-side management programs for industrial customers.

GAM will continue to closely monitor the growth on Georgia Power’s system to guard against over-building or acquiring more capacity than needed.

 

Continuation of 2022 Rate Case Settlement to “Freeze” Base Rates

In the 2022 Georgia Power Rate Case, GAM was instrumental in negotiating a settlement with Georgia Power, Commission Staff and other parties that contained numerous benefits for our members.  We reported on these benefits and for members served by Georgia Power, provided individualized impact letters demonstrating the value of our participation.

Base rate cases for Georgia Power typically occur every three years under recent Commission practice.  As such, the 2022 settlement included a provision requiring Georgia Power to file a new rate case on or about July 1, 2025, with any rate adjustments set to take place after the conclusion of the case on January 1, 2026.  Given the significant number of rate increases in recent years faced by all ratepayers (the 2022 rate case, fuel rate increases, Vogtle units coming online), GAM has advocated to Georgia Power that it consider stabilizing base rates and not seek an increase in 2025.  Simultaneously, we have been working to prepare for a rate case, advocating for pro-manufacturing positions to be taken in Georgia Power’s rate filing.

In May, Georgia Power announced that it had reached agreement with the Commission Staff to “freeze” rates for three years.  This would keep the 2022 rate settlement in place for 2026, 2027 and 2028, with no base rate increases except for an adjustment to be determined in 2026 related to excess storm damage costs.  Many of the provisions reflect GAM’s positions on rate issues, especially and most importantly the preservation of the vast majority of the 2022 settlement GAM helped to design.  GAM signed on to the rate case settlement.  The Commission approved the settlement on July 1.

The rate case settlement provides numerous benefits for GAM members, including but not limited to:

• No base rate increases until at least January 1, 2029, with the exception of increases to address excess storm damages costs. This helps stabilize rates at a time when it is desperately needed.
• No change to existing rate design benefits that GAM has negotiated and fought for over several cases, including no assignment of additional costs to RTP rates. This is no small benefit as, in our view, several parties including the Commission Staff were planning to make proposed rate design changes an issue in this year’s rate case – and generally not to the benefit of manufacturers.  Thus, the settlement provides certainty and avoids significant risks we would have faced in a filed case.
• Alignment with the Commissioners, who generally were very supportive of the settlement.

Georgia Power will be allowed to recover reasonable and prudent storm damages costs in a separate case to be conducted in 2026 – and this rate adjustment could be fairly significant as the under-collected storm damages amount (unaudited at this point) is in the neighborhood of $800 million.  However, the time period and exact method of recovery will be determined in that separate proceeding and GAM will strongly advocate for a beneficial and fair rate design and recovery period.

In addition, Georgia Power retains the benefit of its established return on equity range, subject to the sharing mechanism for recovery above such range.  Georgia Power also will be allowed to utilize certain limited tax and regulatory benefits that otherwise would have been deferred in order to better maintain its earnings targets.

It is important to recognize the benefits of a three-year base rate freeze.  In a typical rate case proceeding, GAM is able to calculate, with a great degree of precision, the savings for members due to the Association’s intervention and engagement in such a case.  Because the approved settlement this year avoided a case altogether, we do not know what specific increase Georgia Power would have sought in a fully litigated proceeding.  However, the Company testified that its preliminary analysis showed a revenue deficiency of approximately $2.6 billion.  Thus, had the Company filed a rate case, it certainly would have sought a substantial rate increase and it is very likely that GAM members would have experienced a rate increase of some measure.

 

Upcoming Cases

The calendar provides only a brief respite from Commission activity and Georgia Power cases.  This summer the Commission will issue an all-source request for proposal for up to 8,500 MW of resources to go into service in 2029-2031.  GAM will intervene to ensure the resources selected meet the reliability and affordability criteria that manufacturers need.

In 2026, Georgia Power will file a new fuel cost recovery (“FCR”) case that will re-set the fuel portion of members’ rates (for RTP customers, the fuel portion of the Customer Base Line, or CBL).  As the large under-collection driven by spikes in natural gas prices is paid down, GAM is hopeful that some relief on fuel rates can be realized in this case.  In addition, as called for by the settlement to continue the 2022 rate case order (described above), the Commission will conduct a case to determine the amount and period of recovery for the excess storm damage costs brought about by Hurricane Helene and other storms.  This case will also take place in the first half of 2026.  GAM will intervene in both of these cases and aggressively defend the interests of manufacturers.

If you have any questions about any of these cases or any energy-related issues please don’t hesitate to contact me directly at cjones@gamfg.org.