Alagasco lowers utility ratesPublished 11:00pm Tuesday, November 5, 2013
Alabama Public Service Commission President Twinkle Cavanaugh announced that the commission had voted to approve rate and revenue reductions for the Alabama Gas Corporation (Alagasco) on Tuesday morning.
The decision to lower rates follows a commission decision earlier in the year to approve rate and revenue reductions for the Mobile Gas Company.
As with its decision concerning the Mobile Gas Company, the commission voted to lower the rate of return earned by Alagasco by 280 basis points.
Alagasco’s rate of return had been set since 1987 at a range of 13.15-13.65 percent. Alagasco’s new rate will be fixed at a range between 10.50-10.95% until September 30, 2018.
The reduction in Alagaso’s allowed rate of return is expected to result in annual monetary reductions of over $13 million. Over the four-year term of the agreement, total reductions will exceed $50 million. It is expected the Alagasco customers will see their yearly bills drop by $33.
The decision follows a public meeting in Auburn where customers were able to voice their opinions to both the commission and executives of Alagasco on rising utility rates.
Commissioner John H. Oden credited the public meeting process with expediting the commission’s actions. “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,” Oden said. “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,”
Cavanaugh called the decision a victory for Alabama’s consumers. “This is a real victory for the consumers,” Cavanaugh said. “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.”
In addition to reducing the company’s rate of return, the Public Service Commission is also requiring the company to file additional financial documents to better monitor the company’s financial earnings. Customers will also now be able to view their rates on-line or to request the rates by mail.
The agreement also stipulated that further transparent meetings can be held when drastic changes occur in the economy. “One of the things we ensured during this thorough public hearing process is the rate payers’ right to have the rate of return examined when the economy is experiencing extreme volatility,” Cavanaugh said.