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.
Ala. PSC Rejects Call For Formal Review Of Rates
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