Alabama Power customers’ rates may decrease

Published 9:21pm Tuesday, August 13, 2013

Alabama Power customers will see a drop in their electric rates beginning in January, according to Alabama Public Service Commission President Twinkle Andress Cavanaugh, but another commission member said customers should not get their hopes up.

The PSC on Tuesday approved a new rate plan for the company, voting 2-1 to switch the criteria used to determine Alabama Power’s rates from “return on equity” to the “weighted cost of equity.”

In a press release Tuesday, Cavanaugh said that the switch could equal a yearly savings of $30 to $110 for Alabama Power customers, based on a number of factors, including amount of electricity used, weather trends, rate classification and others. Cavanaugh estimated that most consumers who continue using the same amount of electricity would realize an average savings closer to the mid-point of the year.

However, Commissioner Terry Dunn, who voted against the change, said the switch would not make a difference in power bills, according to published reports.

While Cavanaugh says the change will translate into savings for customers, Alabama Power officials are not so sure.

“First of all, we believe we made a strong case that the system, as it stands, is fair,” said Beth Thomas, external affairs manager for Alabama Power. “We are disappointed that the commission has recommended lowering our allowed range. Over the next few days we will be reviewing that recommendation.”

Cavanaugh said Alabama Power’s customers “deserve some relief” in their electric bills.

“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.

Cavanaugh said 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. The changes voted on Tuesday are slated to go into effect in January of 2014.

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