Alabama Power Company customers will see an increase in their power bills starting this month.
According to Alabama Power, fuel costs are to blame for the increase.
During an interview with Mobile radio FM Talk 106.5's "The Jeff Poor Show" on Monday, Public Service Commission president Twinkle Cavanaugh explained how the increase was determined, which she insisted was solely based on fuel costs and not profit.
"First of all, let me say that there have been no increases in the amount the power company or the gas company has been allowed to make," Cavanaugh proclaimed. "No price changes up that they're allowed to make in profits. But they are allowed to recoup the cost it takes them to purchase fuel. And just today in the report from the month of June, consumers were behind in the amount they were paying to Alabama Power Company by over $100 million in fuel costs. This is not any profit. This is just an actual fuel cost. Alabama Power Company is not allowed to charge any extra for the fuel they purchase. It is just a pass-through price.
"What happens is at the beginning of each year, we try to set the formula so that Alabama Power Company can recoup the amount of fuel in the price and cost that they use. The reality is you can never land on zero. I always tell people that's like landing a jet airplane on a postage stamp. No one has any idea what the fuel costs might be for the year across the board. But when you've got natural gas prices going up four times the amount, and coal has followed behind that but not nearly as much. It's lower than that right now. But with all these increases, obviously, the fuel cost has gone really high."
Cavanaugh said last month, the PSC allowed the fuel costs to change, and she said an average home bill would go up a little under $7 a month to recoup fuel costs.
"That is completely on fuel, and that is what President Biden has done to our country," she added.
She blamed similar circumstances for the increase in natural gas utility rates, which could cost consumers an additional $225 annually.
However, she credited Spire, Spire Gulf and Alabama Power for absorbing some of those costs for the time being.
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