SACE | Southern Alliance for Clean Energy

Ask the PSC to Hold Alabama Power Accountable


Like many states, Alabama has an elected Public Service Commission (PSC) that oversees investor-owned utilities (that means Alabama Power). The Alabama PSC, however, lacks critical transparency and accountability measures that are present in other states. We believe the inability of third parties to participate formally in PSC proceedings is part of the reason Alabama continues to be so heavily reliant on outdated fossil technology. Alabama ratepayers pay the second highest bills in the nation while Alabama Power earns an exorbitant 30% higher profit margin than comparable utilities nationwide.

Alabama Power lags far behind other utilities in the region in making a transition to cleaner energy sources. A recent Union of Concerned Scientists report found that Alabama has more coal-fired generation that is “ripe for retirement” and uneconomical than any other state in the U.S. except Georgia. Georgia Power is retiring a substantial portion of its “ripe” units, but Alabama Power has only announced partial retirement of one older plant. The fact that it is clinging to these old, dirty, inefficient plants leaves Alabamians with significant amounts of unnecessary air and water pollution, and subsequent expenses.

For the first time in 30 years, we are seeing the beginnings of progress in Alabama. In early 2013, Commissioner Terry Dunn called for a review of the formula-based, no-public-input rate-setting process. The other commissioners denied a formal review, but the issue has received attention in the media, and an “informal” review began on May 8. SACE participated but found the process to fall far short of what is needed to ensure Alabama Power is accountable to the public. The end result was a minor change in the rate-setting formula that Dunn points out could actually allow a higher profit for Alabama Power, and no change in public access to the review process.

The only regularly scheduled public review of Alabama Power is a two-part informal hearing on the second Tuesday of December. The morning session focuses on the Certified New Plant (CNP) formula Alabama Power uses to recover capital costs of power generation, such as building new plants or putting expensive pollution controls on old, inefficient coal plants. The afternoon covers the basic rate formula, Rate Stabilization and Equalization (RSE). Neither requires a cost comparison of different alternatives, but citizens may attend and ask questions to Alabama Power.

Please ask the Public Service Commission to hold Alabama Power publicly accountable for its spending.


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