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Ala. PSC Rejects Call For Formal Review Of Rates

Rate plans approved years ago by the PSC adjust the utilities' rates so their return on common equity falls within a range. The PSC has provided Alabama Power with a rate of return on common equity of 13 percent to 14.5 percent since 1982. The range for Alabama Gas has been 13.15 percent to 13.65 percent since 1983. The range for Mobile Gas has been 13.35 percent to 13.85 percent since 2002. If a utility's return goes above that range, the PSC can lower consumers' rates. If its returns drop below the rate for long, the PSC can raise consumers' rates.

Alabama Power spokesman Michael Sznajderman said, "We feel the current system has worked well." He said when all factors are considered, Alabama Power's overall return is less than 8 percent, which is in line with similar utilities.

He said a formal review would send a signal of uncertainty to Wall Street, which might damage the utility's credit rating and raise the cost of borrowing money.

Dunn proposed a formal review because it would be a court-like proceeding with everything recorded and one side able to question the other. Kathryn Byrd, president of the League of Women Voters of Alabama, said Dunn's plan would end "the 30-year exclusion of interested parties from access to and involvement in decisions about our electricity and natural gas prices and rates."

Oden said informational meetings are like people talking around the kitchen table and provide more opportunity for individuals and groups to participate without having lawyers represent them.

Under a plan first discussed in December, the PSC will hold informational meetings to discuss rates and other issues for each utility. The meetings will begin with three concerning Mobile Gas at 10 a.m. on Jan. 30, Feb. 21 and March 13. Cavanaugh said Alabama Gas and Alabama Power will follow, with the dates to be determined.

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