On Tuesday, the Alabama Public Service Commission (PSC) voted to give $62 million back to Alabama Power Company customers. After reviewing Alabama Power’s financials, the PSC determined that the utility had overestimated fuel costs this winter. The vote to rebate the funds was a 3 to 0 vote at the PSC’s most recent meeting.
The PSC regulates state-licensed monopolies. Alabama Power Company is guaranteed by the PSC to make a profit, but it cannot price gouge its customers.
Alabama Power Customers are expected to get a credit on their August bills of about $20.
“I think a direct refund is the best way to proceed here, but I also believe the refund would be more impactful if it is made during the summer when residential usage and, therefore, their bills are higher and would equate to a larger return for those consumers,” said Public Service Commission President Twinkle Andress Cavanaugh during the meeting.
The purpose of the Alabama Public Service Commission is to provide a balance between regulated companies and consumers to provide consumers with safe, adequate, and reliable services at affordable rates.
The PSC approved three rate increases for Alabama Power during 2022 due to rising fuel costs.
The entities regulated by the APSC include privately owned corporations providing electric, gas, and water service to the public and select providers of telecommunication and wastewater services. Additionally, railroads, buses, trucking companies, and taxis operating outside police jurisdictions on a for-hire basis remain under the oversight of the APSC. Effective July 1, 2018, Transportation Network Companies were placed under the jurisdiction of the APSC pursuant to Alabama Legislative Act 2018-127. The APSC has a staff of 66.
The PSC is governed by a president and two associate commissioners who are elected on a statewide basis. Each commissioner is elected to serve a four-year term, with the president’s term staggered by two years from the associate commissioners’ terms. The other two commissioners, Jeremy Oden and Chip Beeker, were just reelected in 2022. Cavanaugh faces voters in the 2024 presidential election.
The State of Alabama has two primary electric power generators – the Alabama Power Company (a division of the Southern Company) and the Tennessee Valley Authority (TVA). Because TVA is an entity of the federal government and the U.S. Constitution gives federal law supremacy over state law, the APSC does not have regulatory authority over TVA.
Alabama Power has 1.5 million customers. Twenty-five percent of the company’s power is generated by burning oil and natural gas, 43 percent is produced by burning coal, 24 percent is nuclear, and 8 percent is produced through hydroelectric dams. 24.34% of Alabama Power’s costs are spent on fuel and purchased power. The company has total revenues of $5,678,066,345.
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