By Brandon Moseley
Alabama Political Reporter
On Tuesday, the Alabama Public Service Commission voted to approve a rate reduction affecting Alabama Gas Company (Alagasco) and its customers.
PSC President Twinkle Andress Cavanaugh (R) said in a written statement, “This is a real victory for the consumers. I promised to review all utility rates regulated by the PSC in order to keep utility rates down and, in return, continue to recruit and grow jobs in Alabama. All of these efforts boil down to Alabama families getting to keep more of their hard earned money.”
PSC Commissioner Jeremy Oden (R) said in a written statement, “During the Mobile Gas, Alabama Power, and Alabama Gas proceedings, I have continued my commitment to hear directly from actual rate payers by calling for public proceedings in off-site locations. The public hearing in Auburn for Alabama Gas Company, on September 25th, provided customers the opportunity to speak directly to the company and to me and my fellow Commissioners.”
Commissioner Terry Dunn (R) said of Facebook, “The PSC has long allowed a return on equity above the average equity return for utilities nationally. “That’s why today’s decision was in no sense punitive; it was an example of the PSC doing its job — but a job that’s more than a decade overdue in this instance.”
Oden said that over the life of the revised four year term, Alabama Gas Company customers should see cumulative savings reaching upwards of $50 million. These savings take into account Alabama Gas Company operating at an allowed equity of 56.5%.
Commissioner Oden said, “During the Mobile Gas, Alabama Power, and Alabama Gas proceedings, I have continued my commitment to hear directly from actual rate payers by calling for public proceedings in off-site locations. The public hearing in Auburn for Alabama Gas Company, on September 25th, provided customers the opportunity to speak directly to the company and to me and my fellow Commissioners.”
The Commission voted to lower the rate of return Alabama Gas Company is allowed to earn by 280 basis points, the same reduction that Mobile Gas Company received earlier this year. This reduction is the largest one-time decrease in an allowed return by a regulated utility in recent history.
Since 1988, the return for Alabama Gas Company has been in a range of 13.15% – 13.65%, with a point of adjustment at 13.4%. The PSC lowered the range to 10.50% – 10.95%, with the point of adjustment at 10.80%.
This is projected to decrease annual Alabama Gas revenue reductions by over $13 million which will be passed on to rate-payers bills. Oden predicted that over the life of the revised four year term, Alabama Gas Company customers should see cumulative savings of upwards of $50 million.
