PSC eliminates rate cases for Atlanta Gas Light

[private]The Public Service Commission unanimously approved Tuesday a new procedure that allows Atlanta Gas Light Co. to set its own rates without having to file a rate case in which the utility would be required to justify its rates.

The new procedure, called GRAM (Georgia Rate Adjustment Mechanism), was proposed by the gas utility last year and was supported by the PSC staff.

Atlanta Gas Light now has an earnings band, with the authorized rates adjusted up or down from year to year. The utility is required file financial information with the PSC every quarter detailing its revenues, expenses and capital expenditures.

PSC Chairman Stan Wise asked if the commission was tying its own hands by allowing the utility giant to effectively set its own rates.

“I’ve got some concerns with how we tie the hands of future commissions or even this commission,” Wise said. “I’m concerned that this is like a continuation budget — it builds on itself, year after year, and perhaps the utility can get a false sense that they’re entitled to this, they don’t have to show justification for that spending.”

“Your hands are not tied,” said Tom Bond, the commission’s director of utilities. “The commission can initiate an earnings review at any time. The company still retains its right to file a rate case at any time. You can use this GRAM as long as you think it’s doing what you want it to do.”

While AGL contended that the new procedure would “produce lower rates than traditional cost of service ratemaking,” critics of the plan called it “gas company chicanery.”

© 2017 by The Georgia Report


Tags: Atlanta Gas Light , PSC , rate mechanism , Stan Wise