Groups recommending changes in Alabama Power rates

Published on NewsOK Modified: July 16, 2013 at 4:01 pm •  Published: July 16, 2013

MONTGOMERY, Ala. (AP) — Some groups will call for rate changes for Alabama Power Co. when the state's utility regulatory board wraps up hearings on the state's largest electric utility.

In position papers filed ahead of the meeting, AARP and Alabama Arise maintain the current rate structure is too favorable to the company. Alabama Power says the rate structure is fair and reasonable.

The Alabama Public Service Commission has been holding hearings on whether to change its rate stabilization plan for Alabama Power. Wednesday is supposed to be the final hearing, but commissioners said the proceedings, which are open for public comment, could extend into Thursday if necessary. After that, the commission will study the material submitted during the hearings — including testimony from company officials and utility experts on Wednesday — and make a decision in a few weeks.

Alabama Power's rate stabilization plan provides the company with a rate of return on common equity of 13.0 percent to 14.5 percent. Small rate adjustments can be made when the return falls outside the range.

AARP, which represents older citizens, hired rate expert Stephen Hill. He is recommending a 10 percent return, which is slightly higher than then company's cost of equity. He estimated that would save customers about $172 million in one year.

Alabama Arise, which represents Alabama's poor, hired utility expert David Schlissel. The organization's position paper says he will tell the PSC that the regulatory system for Alabama Power "unjustifiably rewards the company and is costly to the citizens of the state."

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