I've been tracking Georgia Power's monthly fuel cost recovery filings and something doesn't add up with their coal procurement costs. In January they reported paying $47.23 per ton for coal from their Bowen plant supplier, but the same coal from the same mine was quoted at $39.80 per ton on the spot market. That's a $7.43 per ton markup that's getting passed directly to ratepayers through the fuel adjustment clause. Has anyone seen similar discrepancies in their territory?
Georgia Power fuel adjustment - something fishy with coal costs
Eleanor, I see the same thing with Alabama Power down here in Huntsville. Their fuel costs seem to run about 8-12% higher than market rates. I think these utilities have long-term contracts that lock in higher prices, then they get to recover the full contract price even when spot prices drop. It's a heads-I-win-tails-you-lose situation for ratepayers.
The Missouri PSC requires Ameren to file detailed fuel procurement reports every quarter. What I've learned is that utilities often have affiliate companies doing the fuel purchasing, and there can be some creative accounting between the affiliates. Check if Georgia Power has any subsidiary companies handling coal procurement - that might explain the markup.
Elmer, that's exactly what I was thinking. Southern Company Services handles fuel procurement for all the Southern Company utilities including Georgia Power. I bet there's some kind of management fee or overhead allocation that's inflating the reported fuel costs. I'm going to request the affiliate transaction details from the Georgia PSC.
Eleanor, you might want to also look at their transportation costs. TVA here in Tennessee got caught inflating their coal transportation charges by using their own railcars and charging above-market rates for the transportation service. It was an extra $2-3 per ton that customers were paying without knowing it.