Alabama Power’s two-year rate freeze sparks debate: smart relief plan or political strategy?
A new move by Alabama Power to freeze electricity rates through 2027 has drawn sharp criticism, with one nonprofit accusing the utility of playing politics rather than helping people manage their bills. And this is where the controversy begins.
Energy Alabama, a nonprofit advocating for lower power costs and clean energy, argues that the so-called rate freeze is more about optics during an election cycle than genuine affordability. John Dodd, the group’s policy director, claims the company could lower rates right now instead of merely postponing potential increases. In his words, this plan “isn’t a rate reduction—it’s a deferral of higher costs.”
Attempts to get Alabama Power’s response were not immediately successful. However, the company recently notified the Alabama Public Service Commission (PSC) that it plans to keep rates unchanged for two years. The decision reportedly follows discussions with both the PSC and the Alabama Attorney General’s Office.
In a written statement, Alabama Power said it’s acting out of concern for customers: “We know budgets are tight, and power bills are a real concern for many families and businesses.” The company insists that the freeze is part of broader efforts to stabilize monthly bills and offer customers predictability.
But here’s the part that raises eyebrows. To make the freeze work, Alabama Power says it will depend on internal cost-saving measures rather than raising prices. CFO Moses Feagin explained in a letter that this step would provide customers with “a measure of rate stability.” Still, the company plans to delay until 2028 any price adjustments related to its recent purchase of the 895-megawatt Lindsay Hill natural gas plant near Billingsley—a $ investment previously approved by the PSC.
The utility also asked for approval to redirect any customer refund money from the Rate Stabilization and Equalization (RSE) program into its Natural Disaster Reserve, which currently carries a negative balance. RSE is the system Alabama Power uses to balance its profits—if earnings rise too high, rates go down; if profits fall below a threshold, rates go up.
Additionally, Alabama Power wants to use its 2024 nuclear production tax credits to offset retail power costs. Dodd argues that both the deferred rate increases and these tax credits could offer immediate relief if applied now. “What’s really being delayed,” he said, “is when the public actually feels the price hikes. Meanwhile, the company could be earning interest on those deferred amounts.”
Dodd also drew comparisons to Georgia Power, a sister company that implemented a similar rate freeze through 2028 after three years of gradual increases. Critics in Georgia have accused that utility of doing the same thing—locking in profits instead of passing savings along to consumers
(https://www.11alive.com/article/news/state/georgia-power-three-year-rate-freeze-officially-approved/85-8ed08438-3eb9-4e4e-9360-40681096e0cf).
Energy Alabama contends that this Alabama proposal benefits the company’s public image and gives commissioners something to tout ahead of election season. According to Dodd, “Our commission has the authority to lower Alabama Power’s extraordinarily high profit margin. This situation is entirely fixable—if the PSC chooses to act.”
The Public Service Commission will hold its next public meeting on December 2 at 10 a.m. in Montgomery, where these arguments are expected to take center stage.
But what do you think: Is Alabama Power genuinely trying to ease pressure on households—or just buying political goodwill before the next election? Share your take in the comments below.
