Alabama Power Faces Pressure to End Customer-Funded Advertising Costs
Regulators seek voluntary halt to billing customers for ads before 2029 legal deadline.
1Regulatory Request for Change
The Alabama Public Service Commission recently requested that Alabama Power voluntarily stop billing customers for television and general advertising costs. This move aims to provide immediate relief to consumers, rather than waiting for a state law that prohibits such charges to take full effect on January 1, 2029, across the state.
2Current Billing Mechanisms
Under existing regulations, Alabama Power is permitted to pass half of its non-public safety advertising expenses directly to retail customers. Last year, the utility spent over $6 million on general advertising, which equates to roughly $4 per customer. These costs are currently integrated into the company's Rate Stabilization and Equalization filings.
3Legislative Context and Timeline
A state law passed earlier this year mandates that Alabama Power must eventually cover all advertising expenses using corporate profits instead of customer bills. However, this prohibition is not legally binding until 2029. The commission's current motion seeks to accelerate this transition by requesting voluntary compliance for the 2027 and 2028 periods.
4Commission Leadership Dynamics
PSC President Cynthia Lee Almond initiated the motion during a meeting, receiving support from commissioners Jeremy Oden and Chris Beeker IV. This decision comes as the commission prepares for a major structural overhaul. In January, the body will expand from three members to seven, significantly altering the regulatory landscape for state utilities.
5Upcoming Commission Overhaul
The commission transition involves the departure of Oden and Beeker, who were defeated in Republican primaries. They will be replaced by Sheriff Matt Gentry and former commissioner Jim Zeigler. Zeigler previously served on the commission from 1975 to 1979, a period marked by intense political battles regarding rising energy costs and rates.
6New Energy Governance Structure
The expanded seven-member commission will operate under the oversight of a new state secretary of energy, appointed by Governor-elect Tommy Tuberville. This official will set the agenda, and overriding their decisions will require a five-vote majority. The secretary must possess professional experience in utility regulation or energy policy to qualify.
7Consumer Advocacy Perspective
Daniel Tait, executive director of Energy Alabama, praised the commission's move as a significant victory for residents. Alabama consumers have faced some of the highest electricity bills in the nation recently. Tait noted that if implemented, this policy would establish some of the strongest customer protections against utility-funded advertising in America.
8Uncertainty Regarding Compliance
Alabama Power has not yet issued a formal response regarding the commission's request to voluntarily exclude advertising costs from rate setting. It remains unclear how much of the $6 million annual expenditure will ultimately be impacted by this interim measure. The company's decision will determine the immediate financial impact on retail customers.
Original article: Fortune — Alabama Power Faces Pressure to End Customer-Funded Advertising Costs