Alabama Power has announced its plans to maintain steady electricity rates for its customers over the next two years. This decision, communicated by the company’s Chief Financial Officer Moses Feagin, comes after discussions with the Alabama Public Service Commission and the Alabama Attorney General’s Office. The utility company is focused on helping customers manage their electricity bills, particularly during a time when many families and businesses are concerned about rising costs.
In a statement, Alabama Power emphasized the significance of its filing, which is aimed at providing customers with more certainty and predictability regarding electric rates amidst increasing overall expenses. “We know budgets are tight, and power bills are a real concern for many families and businesses,” the company stated, reaffirming its commitment to engaging in continued dialogue with the Commission on these vital issues affecting customers throughout Alabama.
To avoid rate increases, Alabama Power will implement internal cost containment measures, as mentioned in Feagin’s two-page letter. This approach is expected to yield “a measure of rate stability” for the company’s clientele. Accordingly, Alabama Power will maintain specific fuel charge rates and delay adjusting rates related to the recently approved 895-megawatt gas-fired Lindsay Hill Generating Station project until 2028.
In fiscal projections from a previous year, an Alabama Power official indicated that customers might see an increase of approximately $3.80 on their bills starting in 2027, although this has since been reassessed to potentially be slightly lower for certain customers.
Furthermore, Alabama Power is seeking commission authorization to allocate any customer refunds from its Rate Stabilization and Equalization (RSE) formula to its Natural Disaster Reserve, which currently faces a negative balance. The RSE formula allows for fluctuations in rates based on projected profits; higher profits could lead to rate reductions, whereas lower profits might result in increases.
Additionally, the company has plans to utilize its nuclear production tax credits from 2024 to help offset service costs for retail customers. Last year, Alabama Power had projected nearly a 2 percent rate reduction for 2025, indicating a commitment to not just stabilize rates, but also to potentially lower them in the future.
However, the company cautions that its commitments could be influenced by external factors, such as weather patterns, natural disasters, fluctuations in fuel markets, or other unforeseen events, which may alter the conditions under which these plans were set. The Public Service Commission’s next public meeting is scheduled for December 2 in Montgomery, where further discussions on these matters will take place.