Alabama’s largest electric utility plans to delay a scheduled rate hike for an extra year following public concern over high utility bills.
Customers of Alabama Power will still face increased bills from the company’s $622 million purchase of the Lindsay Hill Generating Station, but the increase will be delayed for a year if the state’s Public Service Commission (PSC) approves the plan.
The rate hike, expected to raise an average customer’s bill by about $3.32 monthly, was initially set for January 2027.
“Alabama Power made an informational filing with the Alabama Public Service Commission as part of our ongoing discussions about ways to help customers manage their power bills,” the company stated. “We know budgets are tight, and power bills are a concern for many families and businesses.”
Alabama Power submitted the proposal late last week. A PSC spokesperson said the proposal might be discussed in the commission’s upcoming meeting on Dec. 2.
The spokesperson added, “The Commissioners could approve, modify, reject, or table the proposal pending further information. Any action will require a vote.”
Environmental groups warn that rate increases may still occur over the next two years, even with the proposal’s approval.
Christina Tidwell, a senior attorney at the Southern Environmental Law Center, emphasized the need for full transparency regarding Alabama Power’s rate schedules. “Without this information, it is difficult to understand how much of the bill will be frozen,” Tidwell noted.
Daniel Tait, Energy Alabama’s executive director, pointed out that the proposal only defers costs. “It’s a broken attempt to help the utility weather criticism for its high bills and profits,” Tait said.
Alabama Power’s rates have been under scrutiny, especially with new data center projects potentially increasing demand. An analysis revealed Alabama Power residential customers paid the highest electric bills nationwide due to above-average rates and high usage.
U.S. Sen. Katie Britt (R-Ala.) expressed concern over passing new data center costs onto customers, noting Alabama’s power rates are the Southeast’s highest. Alabama Power insists new data center customers will cover the costs of necessary infrastructure.
Cynthia Lee Almond, the new PSC President, highlighted the need to protect customers from rising rates due to data centers in an op-ed.
Almond wrote, “Utility bills have spiked in some states as residential and small business customers subsidize infrastructure investments needed for big tech.” She emphasized the need to avoid such challenges in Alabama.
Besides delaying the rate increase, Alabama Power’s proposal would maintain current environmental compliance costs and fuel cost factors through 2027. The company seeks PSC approval to allocate potential customer refunds to its natural disaster reserve and use a federal nuclear production tax credit to offset retail costs.
“The filing outlines commitments aimed at providing more certainty and predictability around electric rates,” the company stated. “We look forward to continuing our dialogue with the Commission on an issue that matters deeply to customers across Alabama.”
Original Story at insideclimatenews.org