Montgomery – The Alabama Public Service Commission today approved rate and revenue reductions affecting Alabama Gas Corporation (Alagasco) and its customers.
PSC President Twinkle Cavanaugh said she was pleased that Alagasco customers will receive some much needed relief during these difficult economic times.
“This is a real victory for the consumers,” Cavanaugh said. “I promised to review all utility rates regulated by the PSC in order to keep utility rates down and, in return, continue to recruit and grow jobs in Alabama. All of these efforts boil down to Alabama families getting to keep more of their hard earned money.”
The decrease in Alagasco’s allowed rate of return represents one of the largest one-time reductions in an allowed return by a regulated utility in recent history.
The return for Alagasco, which has been in place since 1987, was reduced from the current range of
13.15 percent to 13.65 percent, to the lower range of 10.5 percent to 10.95 percent.
This reduction in allowed earnings will result in approximately $13.5 million in annual savings to Alagasco customers, which equates to approximately $33 in savings per customer during each year of the agreement, which runs through September 30, 2018.
Cavanaugh said the new agreement gives the Commission greater oversight through additional filing requirements and provides additional information needed to more effectively monitor the Company’s financial performance. It will also guarantee that customers can view their rates online or request a copy in the mail.
Commissioner Jeremy Oden said the process the PSC has used to review rates has been extremely successful to this point, due in large part to their ability to hear directly from the public.
“During the Mobile Gas, Alabama Power, and Alabama Gas proceedings, I have continued my commitment to hear directly from actual rate payers by calling for public proceedings in off-site locations,” Oden said. “The public hearing in Auburn for Alabama Gas Company, on September 25th, provided customers the opportunity to speak directly to the company and to me and my fellow Commissioners. This public hearing process allowed us the flexibility to work directly with our staff, the Attorney General’s Office, and the company to institute significant, tangible savings to ratepayers while ensuring a stable regulatory environment for Alabama Gas Company.”
The agreement the Commission approved today also contains a new provision that ensures open and transparent hearings will be held when drastic changes occur in the economy.
“One of the things we ensured during this thorough public hearing process is the rate payers’ right to have the rate of return examined when the economy is experiencing extreme volatility,” Cavanaugh said.
The Public Service Commission also voted today to approve an application for a Certificate of Industrial Development from Plains Mobile Pipeline, Inc.
The approved project consists of the installation of approximately 2.2 miles of pipeline. It will cost the company approximately $14.4 million and create 40 new construction jobs and retain close to 50 jobs currently employed with the company.
Follow Adam on Twitter @AdamYHN
