Archived Story

PSC votes to lower Alabama Power’s rates

Published 2:12pm Thursday, August 15, 2013

The Alabama Public Service Commission voted this week to implement the largest reduction in allowed rate of return for Alabama Power Company in almost 25 years.

Alabama Public Service Commission President Twinkle Andress Cavanaugh said at the point of adjustment, customers could expect to see a savings of between $30 and $110 on their power bills each year based upon a number of factors, including amount of electricity used, weather trends, rate classification and others.  She estimated that most consumers who continue using the same amount of electricity would realize an average savings closer to the mid-point.

“While Alabama Power Company felt their current rate structure was justifiable, our job as commissioners is to do what’s fair for all, and our hearings showed that consumers deserve some relief in the bills they pay,” Cavanaugh said.

The Commission adjusted the RSE formula to reflect a weighted rate of return on equity with a range of 5.75% to 6.21% with a reset point of 5.98%.  The weighted numbers represent a range of 10.27% to 11.09% with an adjusting point of 10.68% when compared to the newly allowed capital structure of Mobile Gas Company.

The reduction occurred following a series of public rate review hearings conducted across the state, during which commissioners heard almost 24 hours of testimony from dozens of consumers, various interest groups, business owners, utility stakeholders, the Alabama Attorney General’s Consumer Division and others.

Commissioner Terry Dunn, who was the lone member of the PSC to vote against the change, said he doesn’t believe customers will benefit from the reduction.

“Basically, nothing changed,” he said.

If Alabama Power accepts the new plan, it would take effect in December and customers would see it reflected in their January bills.

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