Georgia Power Co. v. Georgia Industrial Group
447 S.E.2d 118, 214 Ga. App. 196, 94 Fulton County D. Rep. 2639 (1994)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under Georgia's Integrated Resource Planning Act, a utility may recover the costs of approved demand-side capacity options through a specific rate rider mechanism, and is not required to use the general test year rate-making procedure applicable to overall base rates.
Facts:
- The Georgia legislature passed the Integrated Resource Planning Act (IRP), which requires utilities to file long-range energy plans and allows them to recover costs for 'demand-side capacity options'—programs designed to reduce electricity demand.
- In accordance with the IRP, Georgia Power filed an integrated resource plan with the Georgia Public Service Commission (Commission).
- Georgia Power created several demand-side programs to encourage energy conservation among its residential, commercial, and industrial customers.
- Georgia Power also operated 'interruptible service' programs, which paid customers 'interruptible service credits' to reduce their electricity consumption during periods of peak demand.
- To recover the costs associated with these demand-side programs and service credits, Georgia Power proposed adding specific surcharges, known as 'riders,' to customer bills.
- The Commission, after holding extensive hearings, issued three orders approving the programs and authorizing Georgia Power to use the riders to recover the costs for a three-year trial period.
Procedural Posture:
- The Georgia Public Service Commission (Commission) issued three orders authorizing Georgia Power to use riders to recover costs for its demand-side programs and interruptible service credits.
- Appellee Georgia Industrial Group appealed the Commission's orders to the Superior Court of Fulton County, the court of first instance.
- The superior court reversed the Commission's orders, ruling that the costs could only be recovered through the general rate case procedure outlined in OCGA § 46-2-26.1.
- Georgia Power, as appellant, appealed the superior court's decision to the Court of Appeals of Georgia, an intermediate appellate court.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does Georgia law require an electric utility to recover the costs of its demand-side capacity options and interruptible service credits exclusively through general rate-making proceedings under OCGA § 46-2-26.1, or may it use a separate rider mechanism as authorized by the Integrated Resource Planning Act?
Opinions:
Majority - Pope, Chief Judge
No. Georgia law does not require costs for demand-side programs to be recovered exclusively through general rate-making proceedings; the Integrated Resource Planning Act (IRP) permits the use of a separate rider mechanism. The court reasoned that the future test year accounting method prescribed in OCGA § 46-2-26.1 applies to general rate cases, not to issue-specific riders. The IRP, specifically OCGA § 46-3A-9, creates a special framework for demand-side programs, allowing utilities to recover the 'actual cost' plus an incentive, which is distinct from traditional rate-making focused on an overall rate of return. The legislature's intent was to treat these costs differently, as evidenced by its contrasting language for recovering power plant construction costs (which are added to the 'rate base') versus demand-side costs (which are recovered 'in rates'). Using the general test year method would frustrate the legislative purpose of encouraging conservation, as it is not designed to recover specific, actual program costs, whereas a rider with a true-up provision accomplishes this goal effectively.
Analysis:
This decision clarifies the relationship between a general utility rate-setting statute and a specific statute designed to promote a particular policy, such as energy conservation. It establishes the principle that a specific legislative mandate can create an exception to a general procedural requirement, granting regulatory agencies flexibility. The ruling empowers commissions like the Public Service Commission to use targeted mechanisms like riders to implement new policies and ensure utilities are properly incentivized to participate in programs that might otherwise reduce their revenue. This precedent allows for more nimble and direct cost recovery for specific, legislatively-encouraged utility programs outside the cumbersome process of a general rate case.
