ATLANTA — Georgia energy regulators approved a rate increase for Georgia Power Co. on Tuesday that will raise its basic service fee for residential customers during the next three years from $10 a month to $14, or $168 a year.

Ruling on the Atlanta-based utility’s first rate case in six years, the state Public Commission voted 4-1 for a compromise the company offered last week in an agreement approved by the city of Atlanta, MARTA, The Kroger Co. and three organizations that represent Georgia manufacturers and other large commercial customers.

Georgia Power originally had proposed increasing the fixed fee to $17.95 a month.

In approving Georgia Power’s offer, the commission rejected alternatives advocated both by the agency’s staff and commission Chairman Lauren “Bubba” McDonald, the lone commissioner to vote against the rate hike.

The staff and McDonald pushed for a lower profit margin for Georgia Power. On Tuesday, McDonald proposed setting that “return on equity” at 10.25%, well below the 10.9% ROE the utility originally requested and 10.5%, the final number the commission approved.

Commissioner Tim Echols, who suggested the final number, said a 10.5% profit margin would protect Georgia Power’s financial integrity, including its credit with bond-rating agencies.

“Maintaining Georgia Power’s financial integrity is important to me and the economy of this state,” he said. “This keeps the company on the low side of Moody’s and S&P’s metrics.”

Environmental and consumer advocacy groups opposed to the increase in the basic monthly fee Georgia Power originally proposed remained dissatisfied with the compromise offer the commission approved.

“Customers who earn a fixed or lower income suffer the most from high electric bills,” said Codi Norred, program director for Georgia Interfaith Power & Light. “Allowing Georgia Power to increase mandatory fees only makes that burden even greater.”

Kurt Ebersbach, senior attorney for the Southern Environmental Law Center, noted that none of the industrial intervenors that signed onto the agreement with Georgia Power represent any of its 2.2 million residential customers.

“While Georgia Power did not get everything it wanted, it’s disappointing that residential customers will now suffer additional financial burden and less control over their electric bills,” he said.

Commissioner Tricia Pridemore described Tuesday’s vote as a pro-business move by the PSC against burdensome government regulation.

“Nationally, we see utilities filing bankruptcy due to overregulation,” she said. “Georgia is different.”

As part of its agreement offer, Georgia Power will not increase rates next year. Instead, the monthly fee will go from $10 to $12 in 2021 and to $14 the following year.

Dave Williams is the bureau chief of the Capitol Beat News Service.

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