We stand up for lower utility rates and cleaner, more efficient energy solutions.

We are led by former Public Service Commissioner and Georgia Watch executive director Angela Speir Phelps and former PSC attorney and Georgia Watch senior counsel Clare McGuire.

Over the last two years, the Consumer Energy Program has:

• Pushed for $7 million of aid to assist Georgians with winter heating bills
• Opposed Georgia Power’s massive $2.1 billion rate increase in 2010 on behalf of its 2.4 million customer
• Challenged Atlanta Gas Light’s $54 million rate request in 2010 on behalf of its 1.5 million customers
• Built a broad coalition of business groups and advocacy organizations across the state to oppose utility rate increases in 2010
• Sponsored expert witness testimony and formally intervened in PSC proceedings to represent ratepayer interests
• Advocated for greater transparency and accountability at electric membership corporations on behalf of the state’s 4.5 million EMC customers
• Fought against legislation to require ratepayers to pre-pay at least $1.6 billion of financing charges and taxes for nuclear plant construction by Georgia Power, resulting in $1 billion of early profits for the company

The Consumer Energy Program will continue to advocate for lower utility bills and a more diversified state energy portfolio to mitigate future rate increases.

The Georgia Hospital Accountability Project broadens accessibility to affordable, safe and effective care at the state’s hospitals for uninsured, underinsured and low-income Georgians by promoting state-level regulations, advocating for hospital policy changes and promoting consumer empowerment through research and analysis, the publication of relevant reports, the engagement of the state’s hospitals and consumer education. Georgia Watch also actively engages key state-level stakeholders, hospital representatives, community leaders and lawmakers in dialogue on these topics.

Highlighting and combating the challenges of low-income, uninsured and underinsured Georgians at hospitals has long been a top priority of Georgia Watch. Since 2007, Georgia Watch has evaluated issues of access and affordability throughout the state, and has conducted detailed analyses of fiscal practices and community benefit offerings of six of the state’s key safety net facilities. In 2009, the organization officially launched its Georgia Hospital Accountability Project.

Through this effort, Georgia Watch:

• Conducts extensive research on community benefit programs and financial assistance policies at nonprofit hospitals, and regularly meets with hospital leaders to discuss challenges to and opportunities for programs within their communities
• Often authors white papers and reports on crucial topics, including an examination of the affect of the new health law on hospitals, the cost of care in Georgia and the need for adequate language services at hospitals. In 2010, Georgia Watch released a report detailing financial access at hospitals within the metropolitan Atlanta area, which delineated other barriers to care for those who are uninsured and underinsured, such as transportation and health literacy
• Actively works with the media, and authors regular op-eds and blog posts dedicated to the project’s core topics
• Engages consumers in its work, and in 2010, surveyed approximately 900 consumers on issues of affordable access at their local hospitals
• Assists numerous consumers on their particular issues, including billing discrepancies, a denial of financial assistance and finding a health care home
• Educates lawmakers, policy makers and advocates on issues of access at hospitals
• Hosts the Health Policy Fellowship, which trains emerging policy leaders on key access and affordability issues

Georgia Watch’s Hospital Accountability Project also actively advocates for transparency and accountability in regards to patient safety at our hospitals. Georgia is one of 22 states that currently do not require public disclosure of hospital-acquired infection rates, which leaves consumers in the dark as to which hospitals are safe and which are not. Georgia Watch is leading the effort to ensure safe care by convening national, state and local stakeholders that will analyze and recommend recourses to make certain patient care is not harmful.

If you put lipstick on a pig it will most likely just look silly – it doesn’t change the fact that it’s still a pig – stinky yet adorned. The same can be said for Senate Bill 160, one of this legislative session’s most egregious bills. It’s a bad bill that got amended in the eleventh hour of session to close an ethics loophole. The loophole allowed lobbyist spending on state employees to go unreported – that loophole is now closed – thanks to the amendment. Although the amendment is good, the bill is bad and it was the wrong bill to attach this amendment to.

Senate Bill 160, sponsored by Senator Don Balfour, will allow utilities regulated by the state to contribute directly to the campaigns of political candidates. It overturns a state law that’s been in the Georgia code for more than 30 years. The law has been there for thirty-five years for good reason. Utilities are monopolies that have tremendous authority granted to them by lawmakers, including the power of eminent domain, allowing utilities to take land if necessary to run pipes or build infrastructure. Eminent domain is a power normally reserved for the government. The legislature determines the monopoly service territory of the utilities, and as evidenced by Senate Bill 31 which passed in 2009, the legislature can impact the rates utilities charge their customers. Senate Bill 31, also sponsored by Senator Don Balfour, was crafted to allow Georgia Power to collect a billion dollars in advance profit on the construction of two new nuclear units at Plant Vogtle – even though the units will not generate power for several more years. The bill was written to exempt large customers from paying this fee – leaving small businesses and residential customers to bear the monthly burden.

Utility customers do not have a choice of service providers and legally must pay the rate they are charged for basic necessities. Utilities do not operate in a competitive marketplace. Their only oversight comes from elected officials. For these reasons – it is not a good idea to enact Senate Bill 160. Powerful monopolies overseen by elected officials should not be allowed to bankroll campaigns. It’s a bad idea and a conflict of interest- which is why Georgia Public Service Commissioners are still prohibited from accepting campaign contributions from the entities they regulate.

Georgia Watch and the Georgia Alliance for Ethics Reform supported the amendment to Senate Bill 160 to close the lobbyist loophole – but the lobbyist loophole fix could have been attached to any number of bills that were better suited to the issue. Senate Bill 160 will allow entities that are already very influential over state policy- even greater influence. It strongly tilts the scale in favor of the powerful special interests over the voice of the little guy- Georgians who are already struggling to keep their business afloat or a roof over their head. We the people may not have the deep pockets or hired lobbyists with the political clout the utilities have- but we do have a voice at the voting booth. This bill passed out of the Senate Ethics Committee unanimously, and received yes votes from most of the Republicans and Democrats on the Senate floor. Many who voted for this bill campaigned on a platform of campaign finance reform and accountability. It is our responsibility, as part of our great democracy, to hold those elected to serve us accountable.

The 2011 legislative session drove home the need for consumer advocacy at the capitol. Special interests are firmly entrenched in our state and we need your help now more than ever to stand up for Georgians. Georgia Watch is working hard to protect consumers, promote transparency, and empower citizens. Please help us by sharing information about Georgia Watch with your family, friends, and neighbors and please contribute today to help us continue fighting the good fight on your behalf. Please support our work- through your tax deductible contribution today. We need your help, and appreciate your support.
Thank you.

The past few months have created a whirlwind of outreach opportunities for Georgia Watch.  We have led consumer workshops on issues ranging from identity theft to affordable hospital care in communities from Stone Mountain to Albany.   We spread the word about Georgia’s leading consumer organization to a diverse variety of Georgians including Rotarians and Optimists, college students, NPU members, seniors, community organizations and members of impactful city ministries across the state.  We were particularly honored to be invited in March to distribute important consumer information to servicemen and women on a wide spectrum of issues alongside the great staff of Army Community Service at Ft. Gordon.

Georgia Watchers (from left) Clare McGuire, Ashley Wilson, and Angela Speir Phelps, along with our fantastic volunteer Isabel, at Roswell Day of Hope

We are currently in the planning stages of a number of summer events with community partners.  If you are interested in having us lead a consumer workshop at your civic, faith or service club or other organization, please let us know at georgiawatch@georgiawatch.org.  Also, remember to keep tabs on our whereabouts by following us on Facebook and Twitter.   We look forward to being in your community in the near future!

Georgia Watch Deputy Director Danny Orrock will appear on Georgia Public Broadcasting’s Prime Time Lawmakers at 7 p.m. tonight to discuss Crossover Day and the consumer impact of various bills currently being debated at the Capitol.

As a reminder, Crossover Day is the last day of the legislative session in which bills must be voted on and moved to the opposite chamber of the General Assembly in order to have a chance at becoming a law.

For a full rundown of today’s busy legislative schedule, make sure to tune in to GPB at 7 p.m. tonight!

After a formal request from Georgia Watch, the Public Service Commission voted unanimously last month to release $5 million from a special fund to help seniors and low-income customers pay their natural gas bills in the wake  of extreme weather conditions.

Four million dollars will be credited to qualifying low-income seniors on the Atlanta Gas Light distribution system. The money will show up as a line item credit on gas bills. The Salvation Army will receive the remaining funds and  open the application process to all low-income AGL customers, regardless of age.

According to the PSC’s order, individual credits in all cases are not to exceed $300.

“We applaud the PSC for acting quickly to address a situation that has reached emergency levels,” said Georgia Watch executive director Angela Speir Phelps, a former public service commissioner herself. “The recession has hit  consumers hard and record-low temperatures are exacerbating an already dire situation.”

The $5 million will be disbursed from the PSC’s Universal Service Fund (USF), one of the purposes of which is to assist low-income residential consumers in times of emergency. As of December 2010, the USF balance was  approximately $30 million.

The new funds will supplement the state’s rapidly dwindling resources from the Low Income Home Energy Assistance Program (LIHEAP), a federal program created to help residents pay utility bills during the warmest and  coldest months.

Many community groups tasked with distributing LIHEAP funds are reporting exceptionally high demand as a result of the record-low temperatures. Earlier this month, Fulton Atlanta Community Action Authority was forced to  stop accepting new LIHEAP applications due to exhaustion of funds. Joyce Dorsey, CEO of the Fulton agency, has stated that recent demand for financial aid is the worst she’s seen in 20 years.

It’s awfully cold out there and this $5 million will make a real difference in helping residents keep their heat on,”said Speir Phelps.

For more information on LIHEAP, check the Public Service Commission’s website at www.psc.state.ga.us, as well as www.liheap.org.

As the official website of Georgia Watch’s Hospital Accountability Project, www.GaHAP.org provides a breadth of information about hospitals, pricing, coverage and low-cost options for care.

Through an interactive map that allows consumers to click on their region of the state, Georgians are able to learn more about the hospitals in their community.

Included in hospital listings are links to hospital websites, including links to pages providing information about financial assistance policies, eligibility requirements and applications. In addition, the average mark-up of the hospital is listed, as are certain quality measures.

As many consumers need low-cost options for care, contact information on local community health centers, including Federally Qualified Health Centers, is available on the site. Visitors can also read about key public health data, which is provided by the Partner Up! for Public Health campaign. By knowing more about their community, consumers can become more engaged and work together to solve some of the health problems that may surround them.

To help consumers stay as informed as possible, GaHAP.org also publishesinterviews with key healthcare stakeholders, community leaders and policymakers.

In addition, the site will regularly feature issue briefs on crucial topics, such as health reform, medical debt and hospital community benefits. The site also hosts all reports and white papers authored through the project, including its comprehensive Metropolitan Atlanta Hospital Accountability Project. Finally, the site will also link to relevant news and information from media outlets across Georgia, giving consumers the chance to learn what’s happening throughout the state.

Consumers are encouraged to visit regularly www.GaHAP.org as content is added weekly.

If you would like to share your story, provide feedback or suggest new information, please use the site’s “contact us” form to get in touch.

According to NCPHIF, the following are some of the most common home contractor scams.

The “Free Roof” Scam

A contractor tells you they will pay your insurance deductible for you. Do not do it! This is a big fraud red flag! There is no such thing as a free roof. Contact your insurance agent for guidance.

The “Free Inspection” Scam

Inspections should be initiated by a phone call from you, not a contractor or sales person coming to your door. Never open the door. When you invite a solicitor into your home, you are creating an opportunity for someone to find and/or create new damage to your property, rob you of your possessions, steal your identity, and potentially physically harm you.

The “Hail Storm Damage” Scam

Many times hail storms are not severe enough to cause hail damage on your roof. Before you believe a contractor’s opinion that you have severe hail damage, check to see if you have hail damage at ground level (i.e., your car, air conditioning unit, grill, etc).

The “Pulling the Building Permit Yourself” Scam

This is never a good idea. It is the contractor’s responsibility to pull the permit, perform the work, and manage the inspections. If you pull a permit yourself, you may set yourself up for a variety of code compliance and/or liability issues that you may not be knowledgeable of. If the contractor gets the permit then he is on the hook if anything goes wrong.

Prepayment Schemes

Homeowners should never prepay for home improvement or home repair work projects. Payment schedules should be part of your contract with defined amounts to be made payable upon deliverables. A reputable contractor will have no problem with this.

Greenwashing

With wonderful words like “energy efficiency” and “eco-friendly”, going “green” is the latest trend for home improvement/repair projects, and dishonest contractors are looking to cash in. Do not just take someone’s word that a product is energy efficient or environmentally friendly, research the product yourself at websites like www.energystar.gov.

During the cold, snowy days of winter we crave sunshine. It’s good for our spirit and our health. Sunshine is also good for the health of our political process. Supreme Court Justice Louis Brandeis said sunshine is the best disinfectant, a profound statement that rings as true today as when Justice Brandeis first said it decades ago.

Our government belongs to us – we the people – and we have a right to know how and why decisions are rendered on our behalf. It’s crucial that citizens and the press have access to information. The people’s business should not be conducted in the dark. A high level of openness is an identifying characteristic of democracy.

For these reasons, Georgia Watch supported Senate Bill 17 during the 2010 session which provided stronger ethics reform including restrictions on lobbyists giving gifts to legislators and capping the amount of gifts, and full disclosure of money spent by lobbyists on legislators for travel and entertainment. On April 19, 2010 Georgia Watch publicly noted that the bill as written would allow lobbyists to pay for travel for public officials without disclosing it – including airfare, meals, and hotel accommodations - as long as the travel was related to bringing a public official to a meeting (even if that meeting were held in Paris, France). Under the proposal, a lobbyist could legally buy a legislator a first class trip to the tropics, including plane ticket, room at the Ritz Carlton, and room service, and it would not have to be disclosed if the trip were for the purpose of a meeting.

We pointed out this glaring flaw and insisted that the public has a right to know how much money lobbyists spend on legislators. The following morning, April 20, 2010, the troublesome language was removed. Lobbyists are now required to disclose this information.

We realized the importance of this provision when we advocated for full disclosure, but who knew that just eight months later this pivotal language would ensure disclosure of a $17,000 trip taken by the Georgia Speaker of the House to Germany – a trip paid for by lobbyists. There may be very legitimate reasons for a lobbyist to pay for travel for an elected official for educational purposes but the public has a right to know, ask questions, and hold accountable those elected to represent us. If Georgia Watch weren’t watching out for loopholes – none of us would be aware today of the Speaker’s recent European excursion.

This year, Georgia Watch is working to strengthen ethics laws and has joined a broad coalition called the Georgia Alliance for Ethics Reform. We are also strongly advocating for greater transparency and access to information for EMC (Electric Membership Corporation) customers.

As Georgia Watch enters our ninth year of consumer advocacy we stand on the shoulders of many who have supported us throughout the years. Please know that when you contribute to us – no matter how small or large the amount – we are grateful.

We thank you for your steadfast support. Without the generous contributions of our members, we could not do the good work we do. At Georgia Watch, we know it is action, not apathy that will mold our future. We refuse to sit on the sidelines and listen as the din of special interest drowns out average Georgians. We are working hard on your behalf and we ask that you continue to stand beside us and support our efforts.

Thank you. Please call me or any of our staff at anytime we can help you.

Learn about Simeon Niles, the 2008 Court Watch Fellow here.

By Angela Speir Phelps
November 24, 2010

Change is all around us – particularly at this time of year as we bear witness to the beautiful changing seasons. The recent elections also brought change on the political landscape.

When the 2011 legislative session begins in January, Georgia will boast one of the largest freshman classes of legislators since 2002. I am inspired by our great democracy at work and reminded on Veteran’s Day that millions of men and women throughout our country’s history have paid a very high price so that we may be allowed the privilege to vote. Our veterans, and the men and women presently serving in the military – and their families – have paid a high price for our freedom.

As I write this column, our veterans and the upcoming Thanksgiving holiday weigh on my mind. We have so much to be proud of and thankful for – our freedom, our families, the beauty and hope of America, and much more than I can enumerate in this column. That pride and hope is a constant for me – as I believe it is for most Americans. Many things may change – but that remains the same.

Our country has fought many battles, and we stand together to fight the economic battle we’re now facing on all fronts – job loss, decreasing home values, increasing healthcare costs, and increasing cost of living including the cost to light and heat our homes.The great recession has made its indelible mark on our lives – changing how many of us handle our finances forever. It has also been the catalyst for change.

It’s been said that adversity introduces us to ourselves. America has faced adversity throughout our history – overcoming it time and time again through the strength, character, and resolute determination of the American people. As history has taught us, adversity also has the capacity to make us stronger and more resilient. There are many changes underway but the constant of hope, strength, courage, and character that makes our country great perseveres.

As the calendar changes from 2010 to 2011 – Georgia Watch will persevere in our efforts to protect Georgians’ pocketbooks. We stand steadfast in our conviction that the power of the people is one of our country’s greatest assets. We will continue to be the consumer watchdog at the Capitol – advocating for greater consumer protections and transparency. We will represent consumers’ interests in the utility cases before the Public Service Commission and we will work hard to educate consumers about their rights.

We are thankful for the opportunity to fight the good fight on behalf of the citizens of our state. We owe nothing less than that to all who paid the price for us by fighting for our freedom. Their sacrifice gave us the right to stand up and speak up for what we believe is right. We will do so and we ask that you stand with us and support us. We are thankful to you for your support and ask that you contribute if you can to support our work. This Thanksgiving, we are thankful for you and we wish you and your loved ones a very happy, blessed Thanksgiving.

The past few months have provided a number of wonderful opportunities for us to connect with our members and concerned citizens throughout the state.

Our outreach presentations have focused primarily on the rate increase proposed by Georgia Power, which is currently being considered by the Public Service Commission. We have had the pleasure of meeting with retirees of Lockheed Martin, several chapters of the Fulton County Council on Aging, the Sierra Club, the South Cobb Rotary Club, and several Neighborhood Planning Units in Atlanta.

Throughout our travels, consumers from Dahlonega to Albany have expressed their disgust that during a time when Georgia leads the nation in unemployment, bankruptcy and foreclosure, utility bills may be going up.

In October, Georgia Watch teamed up with AARP, the Georgia Retail Association, the Georgia Retired Educators Association, and many of the individuals we met through our outreach efforts to rally on the steps of the state capitol and highlight consumer concerns over Georgia Power’s $1 billion rate request. Ms. Helene S. Mills did an excellent job speaking on behalf of seniors who will be dramatically affected by skyrocketing power bills if Georgia Power’s rate increase is granted.

In November, Georgia Watch’s Hospital Accountability Project and Tift Regional Medical Center partnered to sponsor “Affording Hospital Care,” a free consumer workshop which was held at the Neighborhood Services Center in Tifton. The event educated consumers on how best to approach a hospital visit and keep rising healthcare costs in check. We were excited to have the opportunity to talk with nearly 200 patients and residents about ways to navigate the hospital’s financial assistance system, discover additional cost-saving options that make hospital expenses more manageable and avoid predatory loans for medical expenses. We also spoke about ways for consumers to save on their energy and telephone bills, and opportunities for seniors to receive free tax preparation assistance next year. For more information on the event, click here.

We look forward to reaching even more communities across the state in 2011, and will keep you updated on Georgia Watch workshops and other consumer events in your area.

Georgia Watch is proud to announce the addition of Ashley Wilson as our new Consumer Outreach Director and staff attorney.

Wilson will be the first point of contact for consumers, in charge of connecting people to policy and empowering individuals to assert their rights as citizens. She will develop targeted presentations and conduct outreach efforts to help consumers throughout the state and build support for our issues.

“I can’t begin to express how excited I am to be part of Georgia’s leading consumer advocacy organization. It is my goal to see Georgia Watch expand both in our membership and in the number of lives we’re able to impact,” Wilson said. “I’m looking forward to helping Georgia Watch deepen its community involvement and presence across the state.”

A native of Augusta, Wilson graduated in 2002 from the University of Georgia with a B.A. in Political Science. She received her Juris Doctor from the T.C. Williams School of Law at the University of Richmond in 2006, and became a member of the State Bar of Georgia shortly thereafter.

Wilson went on to work at the financial and corporate communications firm Joele Frank, Wilkinson Brimmer Katcher in New York, where she advanced the business objectives of publicly-traded companies through investor relations.

In 2008, she returned to Atlanta to practice law in her home state, and worked as a trial attorney, representing indigent criminal defendants in Henry County.

“Ashley is passionate about helping people and making a positive difference in the lives of Georgians. We are thrilled to have her join our watchdog team,” Georgia Watch executive director Angela Speir Phelps said. “Her experience in the courtroom and business knowledge make her a strong ally for consumers and a valuable asset to our organization.”

To contact Ashley about upcoming events, or to schedule an event, call (404) 525-1085 ext. 13 or email her at awilson@georgiawatch.org.

Shapiro most recently worked as Morning Edition producer for WABE, Atlanta’s NPR station. He reported on a range of topics, including transportation, homelessness, immigration, and the state Supreme Court. He will be responsible for all media contact, as well as internal and external communications in print and on the web.

“Jonathan’s genuine concern about consumer issues makes him a perfect fit for our organization,” Georgia Watch executive director Angela Speir Phelps said. “We have important issues ahead of us on energy, healthcare, and mortgage reform that will impact all Georgians. He will no doubt play a critical role in helping us.”

Shapiro began his journalism career in Portland, Oregon, helping produce a public affairs program for Oregon Public Broadcasting and writing pieces for The Portland Mercury. Later he worked for a daily newspaper in north New Jersey, covering city politics, education, and crime.

“Georgia Watch had always been on my radar as a reporter,” Shapiro said. “It’s an organization that cares deeply about protecting the interests of Georgians. They focus on every day issues that impact people in a serious way. I’m excited to be part of the team.”

Before becoming a journalist, Jonathan taught social studies in New York City and worked at the Manhattan District Attorney’s Office. A native Floridian, Shapiro graduated from Emory University with a B.A. in political science.

Georgia Foreclosure Crisis Part One identifies irresponsible lending as a main impetus for the housing crisis. Mortgage brokers and lenders often steered borrowers into costlier loans with attractive introductory rates, while taking advantage of specific mechanisms to facilitate overcharging such as yield spread premiums (YSP), or kickbacks.

“At this point, we know Georgia’s record-breaking foreclosures not only hurt borrowers and lenders,” Georgia Watch Deputy Director Danny Orrock said. “They harm property owners whose home values depreciate as the result of neighboring foreclosures as well as local governments that are losing much needed tax revenues.”

Unfortunately, projections that Georgia will see 350,000 more homes lost by 2012 have surfaced. Georgia Foreclosure Crisis distinguishes the state’s rising unemployment rate and an influx of underwater mortgages as catalysts for the predicted increase of foreclosures in Georgia.

Other key findings in the report include:

By the end of 2009, 13 percent, or one in eight, of the state’s mortgage-holders was at least 30 days behind on their loan;
Fulton, Gwinnett and DeKalb Counties deliver the highest number of foreclosure notices in the state with a combined average of 21,865 per month;
Georgia saw 25 bank failures in 2009, the most in the nation;
Approximately one in four or 377,000 of Georgia’s 1,573,628 mortgages are “underwater”; and,
Georgia families will lose $13 billion in home equity as the result of nearby foreclosures between 2009 and 2012.

“The report paints a horrifying picture of the effects the foreclosure crisis has had on our state’s families and economy.” Orrock said. “In order to combat future catastrophe, state legislators must enact standards on how the riskiest loans are written, an issue we’ll examine with the second part of this report.”

In late January 2010, Georgia Watch will publish part two of this report which will offer policy recommendations and give detailed analyses of mortgage reform that has been enacted in other states and has proven effective in battling future foreclosures.

Click for the full report.

SB 31, which was signed into law by Governor Perdue earlier this year, forces residential and small business ratepayers to prepay for the expansion at Vogtle while excluding many big businesses. In 2011, these Georgia Power customers will see an increase of $1.30 per monthly power bill, a cost that will ratchet up each year to around ten dollars per month in 2017. These increases will occur years before the reactors produce a kilowatt of energy. Additionally, much of the increased cost will not go towards financing new reactors. A large portion of the revenues raised pursuant to SB 31 will increase Georgia Power’s total profits and pay corporate income tax for the utility.

“[SB 31] is a complicated big bill that does one very wrong thing. And that one thing is its presence in [the legislature], it doesn’t belong here.” Sen. Brown said in a speech from the Senate well on February 10, 2009. “That’s what we have the PSC for.”

The PSC, or Public Service Commission, is a regulatory body that was developed to oversee rate and fuel cases in Georgia. The PSC, which is comprised of five commissioners, is charged with balancing a customer’s need for reliable service and reasonable rates with the need of utilities to earn a reasonable return on investment.

“Sen. Brown was right: there was no need for the legislature to get involved in a matter that could be and later was dealt with by the PSC,” Deputy Director Danny Orrock said. “We commend Sen. Brown for speaking up for consumers who will have to start paying for a new nuclear power plant at least six years before it is operational.”

“This is going to cost the citizens of Georgia a lot more money than we even know,” Sen. Brown said. “This is a bad bill, in a bad place, in a bad time, in a bad way.”

Georgia Watch praises Sen. Brown for his impassioned efforts in speaking up for the average consumer and in educating his fellow legislators on the negative aspects of Georgia Power’s accelerated rate increase.

One in eight home loans is past due and on the verge of foreclosure in Georgia. Empty houses are falling into disrepair, homeowners are facing lower property values and families are turning up homeless, scrambling for shelter.

Foreclosures have a“spillover” affect, causing the value of neighboring properties to depress. The average loss to neighboring homeowners is $1,920 per home. In 2009, 1,850,583 homes will be devalued and by 2014, that number will reach 2,823,007.

Georgia Watch member Pat Edwards knows what devastating effect foreclosures have on neighboring property values. She’s seen her home’s value fall 30 percent in the last two years. Despite doing everything right, including purchasing her home without a mortgage, she can really feel and see the effects of the housing crisis.

Pat worked for the State Public Health Department and was able to grow an impressive nest egg by saving money and making prudent investments in real estate. Pat and her husband would purchase a house in need of work and use their nights and weekends to do the all the repairs. They would purchase just one home at a time, using a traditional loan with a down payment from their savings and then live in the home as they improved it.
Once the repairs were done, they would wait for the right buyer and sell it for a profit. Each sale increased their savings which would then be reinvested in another home.

Pat and her husband did this several times over the years and by the time Pat retired they had saved enough cash to purchase their retirement home outright. The home they chose for retirement was a brick ranch in a small subdivision outside of Statham, GA. The home was newly built, which meant Pat could relax into retirement without having to tackle another fixer-upper. The fact that the home was new construction and a single story meant maintenance and energy costs would be lower, allowing Pat freedom from worry about escalating energy costs now that she and her husband were living on a fixed income.

The small subdivision where Pat found her home has two streets, 36 homes and is on a rural road just outside historic Statham. In 2004, house prices in the subdivision averaged $140,000 and attracted an ethnically diverse mix of working class families, retirees and professionals.

In early 2008, Pat began to hear rumors that some neighbors were falling behind on their mortgages. One by one families in the neighborhood disappeared and, all told, 6 homes were foreclosed upon or subject to short sales, meaning a home is sold for a very low cost, just before the bank declares foreclosure.

Five of the foreclosures were on the same street. Private investment bankers and out of state banks bought most of these homes, hoping to cash in.

Unfortunately, as it turns out, out-of-state investment bankers don’t make great neighbors. Many of the homes they own have fallen into disrepair as no one is there to monitor their state. Others have turned into rental properties that are constantly being moved in and out of, with little oversight from an out-of-town, corporate landlord.

Many of Pat’s neighbors have tried to sell their homes as a result of the depreciating quality of property. However, homeowners who owe more on their mortgage than their house is actually worth are left with little choice but to stay. Pat says one neighbor has been trying to sell their home the last two years. The homeowner can’t get close to what they still owe since a house up the street sold for $88,000 after being foreclosed on.

Unfortunately for Pat and her neighbors things may still get worse:

• The Center for Responsible Lending and Consumer’s Union report that foreclosures in Georgia will continue to rise until 2012.

Now, as the result of a market that isn’t going to repair itself for quite some time, Pat is left with a hard choice. She can stick it out, hope things change and risk even more depreciation, or sell now and take a devastating hit to the cash investment she made in the house.

Even with tough choices looming, Pat remains optimistic and knows she and knows she and her husband are actually quite lucky.

“Our CPA and some friends told us we should invest in the stock marker rather than a home. Then we would really be in dreadful shape. We could have lost all the money and have no where to live.”

How could things be different? The leading factor for foreclosure is homeowners defaulting on subprime loans. While the subprime market represents just 13 percent of all outstanding loans in Georgia, subprime foreclosures accounted for 40 percent of the total number of Georgia foreclosures in the first quarter of 2009. Georgia Watch believes more stringent home loan lending practices will help.

Georgia Watch is supporting SB 57, which would take measures to prevent another housing crisis and bar irresponsible lending practices. SB 57 would strengthen income verifications requirements, stop broker kick backs for higher interest loans and ban prepayments penalties.

If you would like to take part in pushing for these changes please call us at 404-525-1085. To share your story, contact Jeannine Malone at (404) 525 1085.

SB 31, which was signed into law by Governor Perdue earlier this year, forces ratepayers to foot Georgia Power’s bill for the expansion at Vogtle while excluding many big businesses. In 2011, ratepayers will see an increase of $1.30 per monthly power bill, a cost that will ratchet up each year to around ten dollars in 2017. These increases will occur years before the reactors produce a kilowatt of energy. Furthermore, Georgia Power shareholders stand to make a billion dollar profit from the financing scheme.

“Senator Williams authored a key amendment to Senate Bill 31, which ensures that Georgia Power’s income received from early financing of nuclear plants is properly accounted for,” Georgia Watch Deputy Director Danny Orrock said. “This takes away an incentive for Georgia Power to over-earn on prepayments for Plant Vogtle and future nuclear construction.”

Sen. Williams’s amendment requires Georgia Power to record costs associated with Vogtle’s expansion in the company’s overall accounting. The utility intended to have the accounting for the two new reactors set apart from their overall company accounting, which is regulated to keep profits within a specified range. In the original language of SB 31, Georgia Power could have kept excessive profit from the financing and construction at Vogtle, with the Sen.’s provision they must balance it with their overall company revenue.

“With the passing of SB 31, Georgia Power was written a blank check that will come out of the pockets of rate-payers,” Georgia Watch Executive Director Angela Speir Phelps said. “The only silver lining of that very dark cloud is Sen. Williams’s pro-consumer provision – we commend him for standing up for the average Georgian.”

Sen. Williams is the chairman of the Senate Committee on Assignments and the vice chairman of the Senate Finance Committee. He also sits on the Senate Administrative Affairs Committee, the Senate Appropriations Committee, the Senate Reapportionment and Redistricting Committee, the Senate Regulated Industries and Utilities Committee and the Senate Rules Committee.

2. Projected foreclosures on all types of loans during the next 5 years: 13 million

3. Portion of all homeowners late on their mortgage: 1 in 10

4. Portion of homes where owners owe more than property value (“underwater”): 1 in 5

5. Drop in residential lending from 2008 compared to 2007: over a trillion

6. Between 2006 and 2008, % decline in existing home sales: 24%

7. Between 2006 and 2008, % decline in new home sales: 54%

8. Between 2006 and 2008, % decline in new construction: 58%

9. In 2009, number of neighboring homes that will lose property
value because of nearby foreclosures: 69+ million

10. Average price decline per home (2009): $7,200

11. Total property value lost because of nearby foreclosures (2009): $502 billion

12. Percentage of 2006 subprime loans that went to people who could have qualified for prime loans with better terms: 61%

13. Typical rate difference between a 30-year, fixed mortgage and the initial rate of aggressively marketed ARM loans: half to 8/10%

14. Cumulative default rate for recent subprime borrowers with a similar risk profile to borrowers with lower-rate loans: more than 3x higher

15. During first four years of a loan, the typical extra cost paid by subprime borrowers who get a loan from a mortgage broker, compared to other borrowers with similar characteristics: $5,222

Of Georgia’s 1,573,628 mortgages, 376,954 are “underwater”. And an additional 130,616 mortgages are just 5% away from being “underwater”. Learn more…