Alabama Power says it will not charge customers for most advertising costs

Alabama Power said this week it would stop charging customers for advertising costs except those related to public safety, following a request from the Alabama Public Service Commission, the state utility regulator.

A state law passed in the spring will require the utility to stop using customer money for advertising by 2029. But PSC President Cynthia Almond moved to ask the utility to implement it on an interim basis at the commission’s meeting on Nov. 3.

“I don’t see any reason that we shouldn’t take steps now to begin that process rather than waiting Jan. 1, 2029,” she said during the meeting.

The move passed unanimously. Alabama Power said in a statement Monday it planned to comply with the request.

“While the commission’s written order has not yet been issued, based on the motion approved at the November meeting, Alabama Power plans to comply by removing advertising expenses from customer rates in 2027 and 2028,” the company said in a statement Monday. “We will evaluate the order once it is released.”

The agenda did not list advertising cost as one of the items on the agenda of the Nov. 3 meeting. Almond did not say how much rates would decrease because of the decision or if it was in response to any advertising from Alabama Power.

Alabama residents pay higher than average utility rates compared to other states in the Southeast. According to the U.S. Energy Information Administration website, Alabama residents paid an average of 16.33 cents per kilowatt-hour. By comparison, Tennessee residents paid an average of 13.42 cents per kilowatt-hour; Mississippi residents paid 14.43 cents; Florida residents paid 14.99 cents and Georgia residents paid 15.90 cents.

Messages were sent to Alabama Power and the Public Service Commission Tuesday seeking clarification on potential rate impacts.

The company also said in its statement it has followed Alabama law and previous orders from the PSC that “half of advertising costs are excluded from customer rates.” The statement also said that advertising costs that are part of its rates deal with “electrical safety, energy efficiency, storm preparedness and scam prevention.”

Gov. Kay Ivey in April signed HB 475, sponsored by Rep. Mack Butler, R-Rainbow City, that made several changes to the PSC, including expanding the number of members; creating a secretary of energy to oversee the commission and placing limits on when a commission can call a rate hearing.

The law also prevents utilities from charging customers for advertising, lobbying and expenses that pertain to grants offered by a company.

In October, the PSC required Alabama Power to make summaries of agreements it makes with the data center publicly available, as well as information about the project and expected power consumption.

Daniel Tait, executive director of Energy Alabama, a nonprofit that advocates for renewable energy in Alabama, praised the decision at its November meeting.

“It is great news,” he said in an interview Monday. “We were really excited by the commission President Almond’s leadership to get these costs out of rates immediately. There is no reason why customers should be paying for any advertising that Alabama Power is doing.”