Alabama’s scandalous utility rates

The Public Service Commission (PSC) is little more than a rubber stamp for Alabama’s big utilities

I think most readers would recognize the Capstone Report as politically conservative whenever we’ve spoken on non-football issues. We’ll admit it. We like small government, honest policies, low taxes and a free market. And those core principles are troubled by the Alabama Public Service Commission (PSC).

The PSC regulates monopolies (power, gas, telephone, etc.). It was conceived of as a way to control the abusive practices inherent to monopolies. Unfortunately, the Alabama PSC has become just another way to perpetuate abusive practices.

The Mobile Press-Register must be commended as the only newspaper in the state willing to examine the rate setting for gas and power. Last winter, the Press-Register revealed natural gas prices in the state were the third costliest in the U.S. According to the Press-Register report: “Press-Register surveys indicate that Alabama’s prices are higher even when compared with areas that have similar gas costs and weather. And taxes represent only a small fraction of the total gas bill.”

And not to be left out of the act of gouging consumers, comes Alabama Power.

According to the Press-Register: “With a rate increase that took effect last week, summertime electricity bills for Alabama Power Co.’s residential customers have spiked by more than one-third in the last five years, according to figures compiled by the state’s utility regulators.”

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In fairness to Alabama Power, the utility does provide some of the cheapest power rates in the nation. However, the PSC allows Alabama Power to operate at a very high level of profitability, according to experts who compare power providers.

The problem with the PSC is that the commissioners have done nothing to control the surge in costs over the last few years. When former commissioner George Wallace Jr. was about to leave the commission, the Press-Register quoted him as saying: Something is not right at the PSC. We need to have an investigation…The commission is not protecting the people of Alabama from high rates, and something needs to be done.”

Today’s Press-Register report confirms that. Something must be done to protect Alabama’s rate payers, and the help won’t be coming from the PSC.