Alabama Power customers set to see rate decreases, despite new EPA regulations

Though EPA regulations are closing in on state-backed energy firm Alabama Power, ratepayers throughout the state are nonetheless likely to see decreases in their energy bills in 2016.

The firm’s newly-diversified portfolio of energy sources, along with lower prices in the coal and natural gas markets, led the firm to cut rates by 2 percent throughout 2016.

“There’s no question – costs 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 on Tuesday.

“Regulatory costs related to coal-fired generation, in particular, are going to continue to rise as more environmental rules come in to play,” added Sellers. “For now, we’re pleased that our fuel flexibility is helping blunt the negative impact of these federal mandates.”

The enactment of new federal environmental rules, meanwhile, have caused the shuttering of three coal power plants run by, according to a release from the utility.

Alabama Power says new rules enforced by the Environmental Protection Agency necessitated the closure of Plant Gorgas Units 6-7 in Walker County, as well as Plant Barry in Mobile County, where “Unit 3 has produced its last megawatt of power.”

The units, which were actively producing power for customers as recently as early this winter, were effective at providing power for Alabamians.

“From a reliability standpoint, Gorgas 6 and 7 were top of the line,” said Billy McKay, an operations team leader at Gorgas. “They were really great units.”

The Walker County facility that housed Gorgas 6 and 7 now serves as temporary storage, the cavernous plant now essentially a holding pen for equipment and supplies.

While the plants were producing plenty of power, they lacked the full suite of environmental controls that coal-fired power plants must now have to meet the latest federal regulations, says Alabama Power.

With the deadline looming to add costly technology or close the units, the company chose the latter.

The company said that while they have spent some $4 billion in the last dozen year complying with EPA regulations, including $1 billion in the last year ahead of the ramp-up of the Obama administration’s Clean Power Plan initiative, the numbers for keeping their plants open just don’t add up.

Other facilities, like at Plant Barry and Plant Gadsden, have stopped using coal and switched to natural gas. The number of coal-fired units will ultimately fall from 23 to 10 due to new environmental rules.

Alabama Power’s vice president of Environmental Affairs Matt Bowden says the outright closures above may not be the last ratepayers see.

“These regulations are forcing us to make costly changes in how we generate electricity for our customers,” said Bowden. “And there are more regulations coming.”