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What do all those numbers mean on my electric bill? Managing utility costs

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Managing your utility expenses

• What is happening to utility costs

• Understanding your electric bill

• Steps you can take to reduce your electric bill

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What is happening to utility costs at the wholesale level

• Natural gas prices are at historic low levels

• Coal prices are declining

• Electric prices will continue to rise for the next several years due to new federal regulations and large capital construction projects in Georgia; Vogtle Units 3 and 4, emission control baghouses on coal plants, etc.

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NYMEX Monthly Natural Gas Costs2000 to 2012

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NYMEX Natural Gas Costs

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NYMEX Coal Future Prices

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Georgia Power rates have steadily increased since 2005

• 2005 rate case increase of $194 million (Docket No. 18300)

• 2008 rate case increase of $321 million (Docket No. 25060)

• 2010 rate case increase of $1,152 billion (Docket No. 31958)

• 2013 rate case?• Plant Vogtle Units 3 and 4 construction

costs?• Emission control expenses for coal plants?

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The major cost drivers for Georgia Power customers

• Implementation of Federal Maximum Available Control Technology/Hazardous Air Pollutants (MACT) rule

• 2013 rate case and Integrated Resource Planning (IRP) case

• Plant Vogtle Units 3 and 4– GP has a 45.7% interest in the two units– Current certified cost of $14 billion– Possible $875 million in cost increases

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Understanding your utility bill

• Review your bill

• What rate or tariff are you on?

• Computing your actual cost per kilowatt hour by subtracting the sales tax and franchise fees from the gross amount of your bill and dividing by the kilowatt hours used

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Riders on your electric bill

• Demand Side Management Rider (1.0795% for commercial customers)

• Environmental Compliance Cost Recovery Rider (10.0131% to be increased in November 2012)

• Nuclear Construction Cost Recovery Rider (6.4362%)

• Total amount of commercial bill - 17.5288%

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Managing utility expenses

• Review your electric bill and get a detailed statement

• Check with your electric utility to find out if there are better rates you could be on

• Take advantage of free energy audits and rebate programs

• Look at ways to conserve energy and evaluate whether they are cost effective

• Check to see if your utility offers bi-directional metering

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The advantages of renewable energy

• No fuel costs• No water usage for cooling• No emissions (NOX, SOX, carbon)• No waste disposal such as spent nuclear

fuel or coal ash

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Electric rate trends for the future

• Electric rates will continue to rise for the next several years due to major capital projects

• Utilities will become more dependent upon natural gas for generation

• More coal plants will be retired due to stricter emission guidelines

• Renewable generation will become more cost competitive due to improvements in technology and increased costs for traditional generation

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Thank you for your attention

Robert B. Bakerbbaker@fmglaw.com770-818-4240