PowerPoints: FERC/PJM Overhang, ES ROE, SO Storms/Fuel, & UGI Refinancings

Research evidence excerpt

PowerPoints: FERC/PJM Overhang, ES ROE, SO Storms/Fuel, & UGI Refinancings

Power & Utilities

Equity Research

May 13, 2026

SO: The headline customer savings lift to ~$285m annualized from the ~$88m implied by Georgia

Power’s February as-filed framing is the dominant data point. The negotiated $109.1m incremental

storm rate adjustment versus $269.7m as-filed combines with the separately filed February 17, 2026

fuel rate decrease (~$388m annualized) to deliver approximately $285m of customer savings per

GP's disclosure ($4.04 per month for a typical residential bill). Simplified arithmetic from the two

headline components produces $279m; the modest gap reflects fuel mechanism modifications within

the FCR-27 stipulation itself. The outcome arrives roughly $190m to $200m better than the February public

narrative implied, with the political benefit landing ahead of the November 2026 PSC election cycle.

The 67-month storm amortization versus Georgia Power’s prior four-year proposal is the

structurally dominant settlement concession and trades cash flow timing for the customer savings

package. Recovery now runs June 1, 2026 through December 31, 2031, extending the cash recovery

cycle by ~19 months. Return treatment on the unamortized balance during the extended period is

not unambiguous from the stipulation text alone and warrants confirmation with IR before being

modeled as a hard input. The financing implication is real but appears manageable within GP's existing

capital program and SO's previously communicated funding plan. The stipulation includes no explicit

prudence disallowance on the ~$880m of Helene incremental restoration costs and does not modify

ARP Extension terms, and explicitly states that no ratemaking policy or precedent is being adopted.