Alabama Power not cutting rates
- Alabama Power Co., which is raising rates about 13 percent, is not planning to cut electric rates like the Tennessee Valley Authority, which recently announced plans to trim back a 20 percent rate boost.
TVA, which serves the northern third of the state, announced that it would cut rates by about 6 percent due to lower fuel costs, beginning January 1.
Alabama Power, which serves much of the southern two-thirds of the state, is not planning a reduction because the utility still is trying to catch up on $300 million it has spent for fuel but has not recovered from customers through utility rates, spokesman Michael Sznajderman said.
TVA, which serves seven Southern states, enacted a record 20 percent rate hike October 1 because of skyrocketing prices for coal and higher costs for natural gas.
TVA spokesman Gil Francis said the federal utility is planning to roll back rates because coal prices have stabilized and natural gas prices have come down.
In Alabama, the state's utility regulatory board, the Public Service Commission, sets rates so that Alabama Power can recover its actual expenses for fuel to run its power plants.
But with fuel prices rising, Alabama Power has failed to recover its costs most months and has run up a $300 million shortfall. Because of that, the PSC approved an 8.24 percent increase October 9 for residential customers.
The PSC also agreed to raise the monthly connection fee for homes and apartments on January 1 from $8.91 to $14.50.
With the two increases, the amount a residential customer pays for 1,000 kilowatt hours will increase from $112.90 to $127.97, equal to 13.35 percent.
In areas served by TVA, the average cost for 1,000 kilowatt hours is currently $102, Francis said. He said the reduction should provide a savings of $4 to $8 per month for homes and apartments.
Sznajderman said it is hard to compare a private utility that pays taxes with a federal utility like TVA that makes payments to governments in lieu of taxes. But he said when the PSC approved the rate hikes for Alabama Power, the company agreed to go through 2009 without a general rate increase. TVA's rates are not locked in by a state utility regulatory board.
Related News
Duke Energy reaffirms capital investments in renewables and grid projects to deliver cleaner energy, economic growth
CHARLOTTE - Duke Energy says that the company will continue advancing its ambitious clean energy goals without the Atlantic Coast Pipeline (ACP) by investing in renewables, battery storage, energy efficiency programs and grid projects.
Duke Energy, the nation's largest electric utility, unveils its new logo. (PRNewsFoto/Duke Energy) (PRNewsfoto/Duke Energy)
Duke Energy's $56 billion capital investment plan will deliver significant customer benefits and create jobs at a time when policymakers at all levels are looking for ways to rebuild the economy in 2020 and beyond. These investments will deliver cleaner energy for customers and communities while enhancing the energy grid to provide greater…