MONTGOMERY, Ala. — Citing increased costs brought on by environmental regulations levied under the Obama Administration, Alabama Power Company on Tuesday filed for its first rate increase since 2011. The increase will raise the average household’s monthly bill by $6.78.
Public Service Commission President Twinkle Cavanaugh, whose panel is tasked with regulating the state’s utilities, said Alabama Power’s spike in costs can be directly attributed to the billions of dollars they’ve spent to comply with the Environmental Protection Agency’s increasingly-stringent regulations.
“Because of the out of control EPA, Alabamians will see a 1.6 percent increase that is due entirely to federal mandates,” said Cavanaugh. “President Obama has declared a war on coal, and he even admitted this will mean higher electricity prices. Obama’s punitive actions against our state and against our economy make it more and more difficult for us to keep electricity prices down.”
Cavanaugh noted that just last year the PSC had decreased the range of profits Alabama Power was allowed to bring in. That decision put downward pressure on rates, but the increased compliance costs brought on by environmental regulations more than offset the change.
“Alabama Power Company has already spent $2 billion to comply with federal mandates,” she said. “But this is nothing compared to the onslaught that is coming. They will have at least another $1 billion on the books in order to comply with the uncertainty of the effects of many more federal mandates being pushed by Obama’s liberal EPA.”
In spite of the increase, Alabama’s rates will remain roughly 10 percent below the national average and 2 percent below the Southeast average, which Cavanaugh said maintains the state’s economic development advantage.
“We here at the Commission will do everything we can, on behalf of the people of Alabama, to push back against Obama’s plan to limit our economic growth,” she said. “Obama’s disastrous economic policies, and his tangled web of burdensome red tape and regulations, have made it more difficult for businesses large and small to operate – and Alabama Power is no exception. That is why we will continue to fight Obama every step of the way, and work for the people of this state to grow jobs and improve their quality of life as best as we can.”
This is the second time this year that the Obama Administration’s much-maligned “War on Coal” has hit home in Alabama.
In August, Alabama Power announced that federal environmental mandates were forcing them to close two of the state’s coal-fired units and transition two others from coal to natural gas, resulting in a reduction in workforce that the company sought to avoid by transferring employees to other locations.
“Federal environmental mandates are forcing us to change how we generate electricity for our customers,” said Matt Bowden, Alabama Power’s vice president for environmental affairs. “They are putting new restrictions on our ability to provide our customers with the energy they need in a cost-effective manner.”
In addition to the coal regulations, the EPA has also proposed the first-ever rules related to greenhouse gases for existing power plants. If these rules are put in place, they could force the company to make additional costly changes to comply.
In a now famous 2009 interview, President Obama said, “Under my plan… electricity rates would necessarily skyrocket.” Conservatives will likely point to today’s Alabama Power rate increase as evidence that he was telling the truth.
Follow Cliff on Twitter @Cliff_Sims
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