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Alabama Power increases rates

The Alabama Public Service Commission approved a $2 billion improvement plan for Alabama Power at its meeting Tuesday with a vote of 2 to 1.

The PSC’s approval opened the door for a monthly rate increase that could cause customers’ power rates to climb about 60-cents per one thousand kilowatt hours in 2005 or about 1-percent every year over a period of nine years, estimated company spokesperson Jan Ellis.

&uot;We’re going to have to make a substantial investment in environmental technology at some of our power plants in order to comply with new tougher environmental laws,&uot; she said. &uot;We’ve been working very closely with the commission to come up with a modification to our rate that would allow the company to recover the cost of these new technologies that will have minimal effects on the customer.&uot;

Ellis the cost per household would be on average about 60 cents per month and that if the company is forced to adhere to tougher guidelines; it is entitled to recover the costs.

&uot;These are mandated laws that are coming down on us,&uot; she said. &uot;Because we are a regulated utility we are allowed to recover these costs.

We have an obligation to serve our customers no matter where they are.

It doesn’t matter if a customer builds a house five miles back in the woods; we have to build power lines to them.

Because we are regulated we are allowed to recover some prudent costs.&uot;

Ellis said between now and 2010, Alabama Power will spend approximately $2 billion to comply with the law.

With the approval, also came a moratorium on any rate adjustments under the rules of Rate Stabilization Equalization.

Ellis said under the RSE rule, no adjustments can be made until 2007.

The APSC voted 2-1 to allow Alabama Power to pass the cost of the federally mandated improvements to its customers.

Commissioners Jim Sullivan and Jan Cook voted in favor of the measure, while George Wallace

voted no.

&uot;This is wrong. You are talking about $2 billion that is going to be placed on the backs of the working people of Alabama,&uot; Wallace said.

The other two didn’t see it that way and refused to delay the issue, both agreeing the law allows Alabama Power to pass these costs for improvement on to its customers.