MONTGOMERY, Ala. — The Alabama Public Service Commission on Tuesday secured a rate reduction for Alabama Power and Alagasco customers, in spite of increasing costs the companies continue to incur due to federal environmental mandates.
A drop in the price of coal and natural gas made it possible for Alabama Power to offset some of their regulatory costs this year, compelling the PSC to push for a 2 percent reduction in the retail cost of electricity through 2016. Alabama Power expects to return an estimated $120 million to customers through the end of next year.
Alagasco customers will see a $22.9 million reduction of rates as a result of the company’s increased operating efficiencies and lower natural gas prices, according to a release by the PSC.
“While rates are going up in other states because of the Federal mandates handed down by the Obama Administration, our Commission has found a way to reduce rates for Alabama Power and Alabama Gas customers,” said PSC President Twinkle Cavanaugh. “We will continue to fight Obama and his out of control, job killing EPA. We will continue to use every measure available to fight Obama and keep rates as low as possible for Alabama families and businesses.”
Commissioner Jeremy Oden bemoaned the “yoke of increased environmental costs” being borne by Alabama Power Customers, but said he was “proud to participate in a vote that will help reduce the burden placed on rate-payers.”
Commissioner Chip Beeker concluded by saying he believes “Alabama families will have an easier time making ends meet due to the actions we have taken today.”
In addition to the residential rate decrease, Alabama Power expects commercial customers, many of which are among Alabama’s largest job creators, to also enjoy cost savings that could lead to further job growth.
“(C)osts related to federal environmental mandates and other governmental regulations continue to be a concern for us,” said Nick Sellers, Alabama Power’s vice president for Regulatory and Corporate Affairs.
“Regulatory costs related to coal-fired generation, in particular, are going to continue to rise as more environmental rules come in to play. For now, we’re pleased that our fuel flexibility is helping blunt the negative impact of these federal mandates.”
As Sellers alluded to, all the news is not good news for Alabama Power and its customers. The company has already spent upwards of $3 billion to comply with federal environmental regulations, and more are on the way.
The company is nearing completion on about $1 billion in environmental controls and other projects that are required to further reduce emissions from coal-fired units and to enable other units to shift from coal to lower-emission, natural gas. Additional environmental regulations are on the way that are likely to present additional challenges, and require more costly changes, to the generating fleet in the coming years.
In spite of the rising costs, Alabama Power’s retail price remains below the national average, while the company’s reliability is ranked among the nation’s best.
“We will continue to do everything we can to provide affordable, reliable power for our customers,” Sellers said. “That’s our focus.”
Cavanaugh: Alabamians just had their power bills lowered, in spite of ‘job killing EPA’ https://t.co/i5juYtB489 pic.twitter.com/nQA6euTk9Q
— Yellowhammer (@yhn) December 1, 2015
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