By Atlanta Business Chronicle

Georgia Power Co. proposed a $615 million rate increase Thursday that would hike monthly rates for the average business by 7.7 percent to 10.3 percent beginning in January and drive up the average residential customerâ¿¿s bill by 10.1 percent, or $10.88 per month.

Additional increases the utility is seeking for 2012 and 2013, if approved by the state Public Service Commission, would send the overall rate-hike request to just more than $1 billion.

The size of the increase, described by a Georgia Power official as the most significant sought by the company in two decades, is a result of the recession slowing the rate of growth in customer demand and almost $5 billion in investments in cleaner sources of power generation, environmental controls and energy efficiency programs.

⿿It⿿s a challenge in this economy,⿝ said Ann Daiss, Georgia Power⿿s vice president, comptroller and chief accounting officer. ⿿But these are costs the company has incurred that have been approved as necessary. ⿦ We have to recover these costs.⿝

To spread the costs of the rate hike over three years, Georgia Power is asking to defer $99 million until February 2012 and $77 million until June 2012. Those expenses are related to the planned construction of two natural-gas units at the utilityâ¿¿s Plant McDonough in Cobb County.

Another $76 million for a third gas-fired unit at McDonough would be deferred until February 2013.

Other deferred costs would cover installation of additional emissions control equipment on Georgia Powerâ¿¿s coal-fired plants and energy efficiency initiatives.

⿿We have worked hard to reduce the immediate impact,⿝ Daiss said.

The companyâ¿¿s cost-recovery proposals for 2012 and 2013 would increase residential bills on average about $5.38 in 2012 and $1.42 in 2013.

Georgia Powerâ¿¿s last hike in base rates was a $322 million increase approved by the PSC in 2007.

The commission is scheduled to hold a series of hearings on the request from early October through early December. A decision is expected on Dec. 21.

On Thursday, officials from AARP Georgia called on the PSC to hold hearings outside of its offices in the state Capitol complex.

⿿Commissioners are elected statewide, and this rate increase, if approved by them, will be felt by consumers statewide,⿝ said Will Phillips, the group⿿s associate state director for advocacy. ⿿We feel that it is extremely important for the commission to hold hearings around the state.⿝

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