## Facts

- Georgia’s Integrated Resource Planning Act (IRP) required electric utilities to submit long-range resource plans and obtain Public Service Commission (PSC) certification for certain resource decisions, including “demand-side capacity options” designed to reduce electricity demand.
- The IRP authorized a utility to recover costs for certified demand-side options and an additional PSC-determined amount to encourage such programs.
- Georgia Power filed an integrated resource plan and proposed multiple demand-side management (DSM) programs, including interruptible service credits paid to customers who agreed to reduce usage during peak periods.
- Georgia Power sought PSC approval to recover DSM program costs and interruptible credits through separate riders (surcharges) on customer bills, with a “true-up” mechanism to reconcile projected versus actual costs in later periods.
- The PSC issued three orders authorizing recovery of these costs through riders and providing for future adjustments to address over- or under-collection.
- Georgia Industrial Group challenged the PSC orders, arguing that O.C.G.A. § 46-2-26.1 required recovery only through base rates established in a future test-year general rate case.
- The superior court reversed the PSC, concluding that the test-year procedure was required for these costs, and Georgia Power appealed.

## Issues

1. Whether DSM program costs and interruptible-service credits had to be recovered through base rates using the future test-year general rate case procedure under O.C.G.A. § 46-2-26.1.
2. Whether the IRP authorized the PSC to permit recovery of certified DSM costs and incentives through separate riders with true-up adjustments.

## Decision

- The Court of Appeals reversed the superior court and reinstated the PSC’s orders.
- The court held that O.C.G.A. § 46-2-26.1 governs “general rate cases” and does not bar riders for specific, statutorily authorized cost recovery.
- The court construed the IRP as providing specific authority for recovery of certified DSM costs (and an incentive amount) in rates, supporting targeted recovery mechanisms such as riders.
- The court approved the PSC’s rider structure, including true-up adjustments to reconcile projected and actual costs.

## Legal Principles

- A general test-year ratemaking statute governing base-rate proceedings does not necessarily control all specialized rate mechanisms.
- When the legislature enacts a more specific statutory scheme authorizing recovery of particular costs (and incentives) in rates, the regulator may implement a targeted cost-recovery method consistent with that scheme.
- Riders that pass through program costs and include true-up adjustments may be permissible where consistent with statutory authorization and not expressly prohibited by general ratemaking provisions.
- Reviewing courts should not replace the PSC’s reasonable statutory interpretation and rate-design choices with their own where the agency’s approach aligns with statutory text and purpose.

## Conclusion

The court held that the PSC could lawfully authorize Georgia Power to recover certified DSM program costs and interruptible-service credits through separate riders with true-up mechanisms, and that the future test-year procedure for general rate cases did not make base-rate recovery the exclusive method for these charges.


Georgia Power Co. v. Georgia Indus. Grp., 214 Ga. App. 196, 447 S.E.2d 118 (Ga. Ct. App. 1994)