Months of public scrutiny from the Alabama Legislature and the public at large seemed to have caught up to one Alabama Public Service Commissioner during their April meeting when he noted the Commission had been “sort of pounded in the public” about not taking a closer look at Alabama Power.
APSC Electricity Division staff members gave their monthly update on rates Rate Stabilization and Equalization (RSE) and Energy Cost Recovery (ECR) for Alabama Power Company in docket 18117, 18416 and 18148. PSC staff performed the monthly examination of Alabama Power’s books and it was determined that the projected weighted return on average retail common equity was 6.10% for the 12 months ending Dec. 31, 2026. This is based on two months of extra data for January through February 2026 and 10 months of budget data for March through December 2026. Staff also performed the regular monthly review on APC’s energy costs and determined the rate, or the ECR, was over recovered by approximately $366,000 in February this year.
In case you’re not familiar, in 1982, Alabama’s Public Service Commission adopted the Rate Stabilization and Equalization (RSE) framework for Alabama Power. RSE is a formulaic rate-setting mechanism approved by the APSC that automatically adjusts customer bills to keep the utility’s weighted return on equity within a specific range. According to Alabama Power’s website, that range currently sits between 5.75 and 6.15%. These rates are based on projected earnings and carry a target adjusting point of 5.98% plus a potential 0.07% performance-based adder, meaning that if projections fall below 5.75% or exceed 6.15%, rates are adjusted to bring them back to this 5.98% point.
ECR is the Energy Cost Recovery, where they’re looking at fuel costs that are tracked through Alabama Power’s operating schedules. PSC staff compares the information given to them by Alabama Power and compares it against the budget.
Commission President Almond asked a few clarifying questions for the “benefit of the listening public online,” asking staff to walk through the numbers they review, how they are provided those numbers, and steps that go in the calculations, noting in closing that this is, “Something that happens every month, okay, so just an open book process between the Public Service Commission and Alabama Power, is that right?”
Commission Oden followed up on President Almond’s general questions regarding the process with more pointed, in-depth questions about how these numbers are generated, concluding with, “I think in the last couple of weeks, we’ve been sort of pounded in the public about not looking at the company, but you’re telling us that we look very thoroughly at that company, and not just one or two issues, but multiple issues when we are calculating RSE, correct?” He then concluded by thanking the staff for their hard work, noting that he wanted to make sure that was clear to the public.
The final item on the utility side of the agenda for the April meeting concerned a proposed 20-year energy supply agreement between Alabama Power and the Brewer-Garrett Company for service to Gunter Annex of Maxwell Air Force Base. The project is expected to begin commercial operation in fall 2027, and was approved unanimously by the Commission.
We write these stories because regulatory decisions shape everyday life, from affordability to reliability, and yet they’re still often a mystery to the average consumer. Our aim is to provide transparent recaps of these meetings and show how you can participate in public comment or hearings.
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