PSC to begin review of Alagasco

Published 2:24 pm Tuesday, August 20, 2013

Montgomery– Alabama Public Service Commission President Twinkle Andress Cavanaugh announced on Tuesday that the three-member regulatory panel will begin a new public rate review process for Alabama Gas Corporation, commonly known as Alagasco.

“After having successfully reviewed and reduced the rates for customers of Alabama Power and Mobile Gas companies, it is time we begin a thorough and balanced look at Alagasco,” Cavanaugh said.  “The members of the PSC will continue balancing what is fair to Alagasco with the need to provide some measure of relief to consumers during these difficult economic times.  Our public rate review process has worked well twice before, and I am confident it will work smoothly during our inspection of Alagasco, as well.”

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

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Alagasco, which serves more than 420,000 customers, last saw its rate stabilization and equalization formula adjusted in 1987. The RSE formula is used to determine the company’s allowed rate of return on its common equity.

The review of Alagasco will begin in September. The first meeting is scheduled for Sept. 5 in Montgomery. According to a statement from Cavanaugh, the commission will engage in a general overview of Alagasco operations and discuss elements of the natural gas business and its economics.

On Sept. 25, the commission will meet in Auburn and will consider and discuss Alagasco-related topics that include pipeline safety, customer service, economic development and corporate risk.  An evening session will be set aside specifically to gather public comment.

The third and final meeting will be held October 9 in Montgomery, and the commission will review the rate stabilization and equalization formula for Alagasco, along with its finances and accounting.

Once the scheduled hearings have concluded, the commission and its staff will review the collected information, determine which rate adjustments are justified, and convene a public meeting of the full panel to vote on suggested changes.