Alabama Power says it will freeze electricity rates through 2027: ‘We know budgets are tight’
Alabama Power intends to keep electricity rates steady for its customers for the next two years, according to a filing with the Alabama Public Service Commission.
In a notification last week by Alabama Power CFO Moses Feagin, the company said the decision came after conversations with the commission and the Alabama Attorney General’s Office.
In a statement, Alabama Power said the filing was made “as part of our ongoing discussions about ways to help customers manage their power bills.“
“We know budgets are tight, and power bills are a real concern for many families and businesses,” the statement reads.
“The filing outlines commitments aimed at providing more certainty and predictability around electric rates at a time when many other costs are rising.
“We look forward to continuing our dialogue with the Commission on an issue that matters deeply to customers across Alabama. We remain committed to our customers and the communities we live in and serve.”
Attempts to reach the commission and the attorney general’s office for comment were not immediately successful.
The Public Service Commission’s next public meeting is scheduled for December 2 at 10 a.m. in Montgomery.
To forego rate increases, the utility will rely on “internal cost containment measures,” Feagin said in a two-page letter.
The move, Feagin wrote, would give customers “a measure of rate stability.”
To do this, Alabama Power would commit to keeping in place certain rates related to fuel charges, and delaying until 2028 any adjustment to rates dealing with its acquisition of the 895-megawatt gas-fired Lindsay Hill Generating Station near Billingsley, which the PSC approved back in August.
An Alabama Power official last October told the public service commission that customers would pay about $3.80 more on their bills beginning in 2027.
However, in August an official said the increase would be a little less than that for some customers.
The company is asking the commission for authorization to apply any customer refund amounts coming from Rate RSE, or Rate Stabilization and Equalization, to its Natural Disaster Reserve to prepare for “future storm events.”
According to the later, that reserve currently has a negative balance.
Rate RSE is a formula whereby if projected profit is higher than the range, rates go down, but if lower than expected, rates increase.
It is also seeking use of the company’s 2024 nuclear production tax credits to offset retail costs of service.
The move comes a year after Alabama Power projected a nearly 2 percent rate reduction for 2025.
“With these Commission directives and authorizations, (Alabama Power) is confident of its ability to fulfill the associated commitments based on the best information currently available,” the letter reads.
Alabama Power does say that “weather, natural disasters, changes in fuel markets or other significant unforeseen events” may “impact these commitments.”
