Alabama Arise, a nonprofit group that works to represent the low-income sector of Alabamians, recently released a report, available on their website, saying Alabama Power lacks transparency in the ways its rates are decided and kept.
The Public Service Commission regulates what Alabama Power does, but Arise said they feel the PSC's accountability methods toward Alabama Power could be improved.
"When we looked at, it turns out that, since making the change in how Alabama Power is regulated, the PSC has really had a sort of 'hands off' policy," said Stephen Stetson, policy analyst for Arise Citizens' Policy Project. "When you compare what Alabama rate payers are paying to other folks in other states, the data shows we might not be getting the best deal possible."
Stetson said they began to look deeper into the rates.
"Maybe there's a connection between the rates that we're paying and the way the Public Service Commission does its job," Stetson said.
Alabama began a new kind of regulatory system in 1982 called the Rate Stabilization and Equalization. Before, rate hearings consisted of both the utilities and the customers bringing in their opinions before each other to discuss them.
Michael Sznajderman, spokesperson for Alabama Power, said that the RSE model keeps rates from being volatil, and they were more fickle in the rate-hearing system before 1982.
"The way RSE works, we're essentially under a continual review by the Public Service Commission," Sznajderman said. "We have to provide reports on a monthly basis...the Public Service Commission staff at every monthly meeting, which is open to the public. Reports on how the system is working, if we're staying within this range that we're allowed to keep rates stable, it's called Rate Stabilization Equalization, and based on a formula these things are adjusted up or down, but the formula also basically caps how quickly rates can increase or decrease, by what margin, etc."
Alabama Power is held accountable to PSC as well as other public, state and federal agencies, but the RSE model has also been tweaked multiple times, Sznajderman said.
"And again, as far as the transparency, while RSE has been in place for 30 years now, the Public Service Commission has looked at that system over the years. In fact, just for Alabama Power alone they have made, I think, 20 different changes to RSE, to various mechanism related to RSE...how RSE works from a policy standpoint," Sznajderman said.
Yet Stetson said Arise feels there needs to be a return to citizen interaction with the PSC and Alabama Power.
"Our only argument- it's a really simple argument -is just that, we need to look at whether the Public Service Commission ought to try a different model for evaluating what's an appropriate rate to be set," Stetson said.
Kimble Forrister, executive director of Arise Citizens' Policy Project said that keeping the RSE provisions in place has not been ideal and that formal hearings would allow disputed issues to be reevaluated.
Sznajderman said the PSC will be holding meetings concerning these issues with the RSE, open meetings and any other questions about Alabama Power on Wednesday May 8, Tuesday June 18 and Wednesday July 17.
Do you like this story? The Plainsman doesn't accept money from tuition or student fees, and we don't charge a subscription fee. But you can donate to support The Plainsman.
