Montgomery Circuit Court denies public access to Alabama Power fuel cost proceedings

MONTGOMERY, Ala.—Yesterday, the Montgomery County Circuit Court denied an appeal by Energy Alabama, represented by the Southern Environmental Law Center, challenging the Alabama Public Service Commission’s dismissal of Energy Alabama’s requests to intervene in proceedings where the commission approves the amount Alabama Power charges customers for fuel.

“This is a disappointing outcome for Alabamians who have no choice but to pay the high cost of fossil fuels on their Alabama Power bill,” said Daniel Tait, executive director of Energy Alabama. “Citizens deserve a seat at the table where regulators are making big decision about their bills, like fuel cost proceedings.”

“While other Southern states have meaningful public engagement in fuel cost proceedings, Alabama Power customers will continue to be shut out of the process,” said Christina Tidwell, a senior attorney in SELC’s Alabama office. “Unfortunately, the commission and Alabama Power will continue adjusting the rates customers pay without transparency and accountability.”

The Public Service Commission twice denied requests by Energy Alabama to intervene in Alabama Power’s fuel cost proceedings. According to the rules governing Rate Energy Cost Recovery (ECR), the public is entitled to hear evidence and participate in any proceedings adjusting fuel costs to ensure these changes are “just and reasonable.” The cost of fuel is a significant portion of customers’ bills.

The Public Service Commission has not held a public fuel cost hearing in over 16 years, but the rate has been adjusted at least 19 times with no opportunity for the public to comment or review the data. The rules are clear: to make any changes to fuel cost–upward or downward–Alabama Power must submit estimates to the commission and the commission must hold a public hearing and allow intervention. There have been only two public fuel cost hearings since the rules requiring them were adopted in 1981. 

Alabama’s ECR proceeding rules are based on the fuel cost recovery process used by the Georgia Public Service Commission, which regulates Alabama Power’s sister company, Georgia Power. The Georgia PSC has held at least 26 formal fuel cost proceedings. 

The cost of fuel, like coal and methane gas, is passed down to customers. Fossil fuel costs are prone to price volatility. For example, in 2022, Alabama Power’s average residential customer’s monthly bill rose over $18 a month because of sky rocketing gas prices.  Unlike fossil fuels, renewable energy resources like solar and battery storage have no fuel costs.