Public Service Commission hearings in base-rate cases are highly technical and include detailed information about utility finances and operations. Gulf’s current base rates stem from a settlement of a 2013 rate case.
A key issue in many rate cases — and likely in the upcoming Gulf hearing — is setting a “return on equity,” a measure of profitability. In its proposal, Gulf is seeking an 11 percent return on equity, while the Office of Public Counsel argues the rate should be 8.875 percent.
Another issue in the case involves whether costs related to a Georgia power plant, known as Plant Scherer, should be included in the base rates. Gulf and other utilities have owned stakes in the plant. In the past, Gulf sold electricity generated at the plant on the wholesale market but now uses power from the plant for its retail customers.
“Gulf is requesting that the (Public Service) Commission now include in retail rates the portion of (the plant) that is no longer committed under long-term off-system wholesale contracts,” Gulf said in the document filed last month. “This action is necessary to honor the regulatory compact that contemplates that Gulf is entitled to the opportunity to earn a fair return on prudent investments that are used and useful in the public service.”
