Alabama public service commission and utility rates

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Regarding the controversy as to whether formal hearings about utility rates should be convened, submitted herewith are some reported facts and figures and some comments made by Public Service commissioners and others. Al.com reported that during the period 2006-2011, the cost of producing electricity sold to residential and commercial consumers by Alabama Power Company was $1.1 billion less than Georgia Power Company’s cost of producing electricity for comparable consumers. Yet, A.P.C. charged $1.5 billion more than G.P.C. did for its product. The two largest natural gas companies operating in Alabama, Alagasco and Mobile Gas, charge their Alabama consumers twice as much as they charge their Mississippi consumers.

Alagasco is allowed by the Alabama Public Service Commission to charge its consumers for rate-making purposes three times more than is allowed by Georgia’s regulatory authority. The profit margin for Alabama Power Co. averages 14.5 percent. The average nationwide is 10.5 percent. Al.com could find no electric energy company in the country with a higher return than is allowed to Ala. Power Co. (A commentary by Nick Sellers, an Ala. Power Co. vice president, states that some of Al.com’s statistics are misleading. Birmingham News, Jan. 27)

Alabama Public Service commissioner Terry Dunn contends that a formal rate review is warranted, because the last one was completed 20 years ago. PSC president Twinkle Cavanaugh and the other commissioner, Jerry Oden voted against Dunn’s proposal.

Cavanaugh, in a public commentary, said that calls for a formal hearing appear to be camouflage for “dangerous ulterior motives by special interests.” She identifies the special interests as “environmental extremist groups that have recently stepped up activities in our state,” and that “Barak Obama’s election and subsequent re-election has emboldened them…”

She specifically mentions the Southern Environmental Law Center and the Alabama Environmental Council as having been “driving this effort from the first day.” She also states that once formal hearings are convened, “they can trot out their fancy San Francisco lawyers and junk science hucksters to make what amounts to a legal, judicial case against coal production within our border.” Apparently, she is not aware that both organizations she mentions are headquartered in the Southeast, the A.E.C. in Birmingham and the S.E.L.C. in Charlottesville, VA. The director of the S.E.L.C., Rick Middleton, a prominent environmental lawyer, is a native of Birmingham.

Cavanaugh also states that PSC formal hearings “do not allow for public input.” I found that hard to believe, and I wrote and asked Commissioner Dunn if Cavanaugh’s comment was accurate. He responded, “A formal hearing, by definition, is the most open process for all parties, including the consuming public. I am extremely concerned about this and other misleading statements.” If formal hearings do, indeed, allow for public input, and if Cavanaugh really believes they do not, she should be better informed, or at least she reasonably should be. Dunn also stated that he would keep pushing for a formal hearing.

Birmingham News columnist John Archibald has written about PSC goings on and in last Sunday’s edition wrote about a conversation he had with Cavanaugh, in which he asked her if her opposition to a formal hearing was about “silencing voices, marginalizing political opponents, muting those who would ask for cleaner air or water…? Is this not just a way of excluding those environmental groups from the process?” Cavanaugh replied, “Maybe so. You can write that. I want to exclude environmentalists from taking part in the process.” I’ll give Commissioner Cavanaugh credit for one thing; she doesn’t talk out of both sides of her mouth. I look forward to seeing Ms. Cavanaugh one of these days, hopefully in Buck’s Pocket.

Readers interested in expressing their views or opinions to Comm. Cavanaugh can do so via Twinkle.Cavanaugh@psc.alabama.gov, or Comm. Dunn at terrydunn2010@yahoo.com.

 

Bob Mount is a Professor Emeritus with the Dept of Zoology and Entomology, Auburn Univ. He is also chairman of the Opelika Order of Geezers, well-known local think tank and political clearing house. He writes about birds, snakes, turtles, bugs and assorted conservation topics.

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