A meeting of the Alabama Public Service Commission held this week in Montgomery will result in a 1.88% reduction in overall retail rates in 2025, thanks to action taken by Alabama Power and the commission, the company reports.
The reduction comes at a time as Alabamians grapple with inflation-driven household expenses. According to the company, Alabama Power has cut its costs by more than $100 million since 2017. The move to lower rates forebodes well for the coming year amid rising costs in the U.S. energy industry.
Alabama Power reports a 204% increase in transformer costs, a 56% rise in power pole prices, and a 134% spike in electrical wire costs over the past five years.
In July, the commission announced a 2.04% rate reduction due to lower fuel costs. This month, the commission announced an additional 3.27% reduction for the same reason.
The commission is also returning $96 million, or a 1.44% reduction, to Alabama Power retail customers in 2025 based on a legal judgment awarded to the company in 2024. These funds will be distributed as bill credits to customers from January to March 2025. The U.S. Court of Federal Claims awarded Alabama Power damages resulting from the federal government’s failure to meet its obligations for the handling of spent nuclear fuel.
A Rate Stabilization and Equalization adjustment of 4.87% was made to account for the rising cost of electricity due to inflation, as well as long-term investments Alabama Power is making in grid resilience and power generation.
Additionally, the commission approved Alabama Power’s request to keep Rate CNP-C flat in 2025, which further lessens the impact of rising costs on customer bills. Rate CNP-C represents compliance costs associated with federal government mandates and environmental regulations.
Electric companies across the nation are dealing with higher cost pressures. Since January 2021, electricity prices in the U.S. have risen 29.4% — 50% more than overall inflation, according to a Wall Street Journal analysis of Bureau of Labor Statistics data.
Grayson Everett is the state and political editor for Yellowhammer News. You can follow him on X @Grayson270
