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Suit Over Atlanta Gas Light Co. Rate Hike Set for May 19 Hearing

AARP claims it was illegally denied right to challenge rate hike.

AARP is challenging the Georgia Public Service Commission’s actions in approving a rate hike that could cost Atlanta Gas Light Co. customers more than $400 million over the next 15 years.

Oral arguments are scheduled May 19 in Fulton County Superior Court in Atlanta on a lawsuit AARP Georgia filed contending that the Public Service Commission (PSC) illegally denied AARP the right to Atlanta Gas Light Co. information that would have helped challenge the rate increase.

Georgia law requires utilities to notify the state Public Service Commission before making any adjustments to consumer bills, and this typically results in a formal process involving public hearings that can take up to six months to resolve.

AARP Georgia contends AGL bypassed that process last June by arguing that its proposed rate change was nothing more than an extension of an existing surcharge for infrastructure improvements approved by the commission 12 years ago. Four of the five commissioners agreed.

When AARP learned of the filing, it asked the utility to open its books so that AARP experts could check the gas company’s calculations. The company refused.

AARP asked the commission to force the utility to turn over the data, but the PSC voted 4-1 against AARP’s request. It then approved the rate adjustment through 2025.

Rates went up in October for AGL’s 1.5 million customers by 39 cents per month. They’re scheduled to rise by that same amount this autumn, and an additional 40 cents next year, for a total of $1.18 per customer per month on top of the original $1.95.

Angela Speir Phelps, a former PSC commissioner who is now executive director of Georgia Watch, a consumer advocacy group, said the rate adjustment would add $3.13 per month from 2011-2025.

“This is another backdoor rate increase on the residential ratepayer at a time they can least afford it,” she said. “It’s a lot of money and it’s not fair.”

That’s AARP’s position, too.

“The PSC is, in essence, forcing the public to pay hundreds of millions of dollars without having had the opportunity to question whether the rate increase is necessary and fair,” said Will Phillips, AARP Georgia associate state director for advocacy.

PSC Commissioner Robert Baker, the lone dissenter in last year’s votes, said both the commission and the utility are wrong, and that “a rate increase by any other name—surcharge, rider, whatever—is still a rate increase.”

Commissioners Doug Everett and Chuck Eaton said they backed the utility because it needs to repair and expand its infrastructure, which would create jobs. The other two commissioners declined comment.

AGL said no formal proceedings are required by law. It also argued that AARP had the chance to ask anything it wanted of witnesses during two days of hearings last year.

John Coffman, AARP’s attorney and an expert in utility cases, said that the company’s refusal to turn over its documents made it almost impossible to challenge the rate request because “we had nothing to go on.”

During the hearings, AARP called one expert witness, whose testimony described why surcharges are bad for customers and can result in overearnings for utilities.

AARP filed suit in October demanding that the decision be overturned and that the utility be ordered to turn over its data.

Fulton Superior Court Judge T. Jackson Bedford Jr. will preside over the hearing. Even if he decides to send the case back to the commission, the PSC could approve the rate hike after going through the formal process.

Russ Willard, spokesman for the Georgia attorney general’s office—by law the PSC’s legal counsel—said he couldn’t comment on the merits of the case because it was pending before the court. But he noted that the attorney general’s office did not play a role in blocking AARP from having access to the utility’s documents.

Craig Dowdy, the utility’s attorney, said in a court filing that AARP had no right to information the company considered secret.

Speir Phelps said Georgia Watch supports AARP, although it has not joined the suit. She noted the consumers had been represented by the state Consumers’ Utility Counsel until 2008, when its funding was eliminated. “This is a problem, because the public no longer has an automatic voice in the debate at the Public Service Commission.”

AARP charges in its complaint to the court that the commission has set a potentially costly precedent by allowing the company “to characterize their rate increase requests in a manner to avoid consumer scrutiny.”

Baker, the commissioner who voted against the rate hike, said that because AGL asked for a speedy review of its request, “the staff did not have time to go out and retain outside experts to assist them. The company came in and said, ‘This is critical, we have to act now, if we don’t we could put the entire system in jeopardy,’ and the commission decided to proceed, just on their word.”

He added that under the new plan, “the little old widow woman on a fixed income is going to be paying the same [for the new increase] as a ‘big box’ store. And through 2025. The whole thing stinks from beginning to end.”

Bill Hendrick is a freelance writer in Atlanta.

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