By PHILLIP RAWLS
Associated Press
MONTGOMERY, Ala. - The state's utility regulatory board is revising the rate structure for Alabama Gas Corp., which should result in savings for customers.
The three-member Public Service Commission voted unanimously for several changes Tuesday. The changes, which go into effect Jan. 1, should save the average customer about $33 annually, PSC President Twinkle Andress Cavanaugh predicted.
The PSC has had the state's largest natural gas utility on a rate stabilization plan providing a return on equity of 13.15 percent to 13.65 percent. The commission set a lower range of 10.5 percent to 10.95 percent. It also raised the company's allowed equity from 55 percent to 56.5 percent.
"This is a real victory for consumers," Cavanaugh said.
Commissioner Jeremy Oden said the change will lower the company's revenue by more than $13 million annually, and that will reduce customers' bills.
Commissioner Terry Dunn said the PSC has long allowed a return on equity above the average equity return for utilities nationally.
"That's why today's decision was in no sense punitive; it was an example of the PSC doing its job -- but a job that's more than a decade overdue in this instance," he said.
Alabama Gas, based in Birmingham, is also known as Alagasco. It serves 425,000 customers in 30 counties, mostly from Montgomery County northward.
The PSC's rate revision for Alabama Gas was similar to one the commission approved unanimously for Mobile Gas in July.
The change for Alabama Gas came after a series of public hearings by the commission.
"We are satisfied with the process and remain committed to providing good service," Alabama Gas spokeswoman Sherri Goodman said. She said the change in the rate structure should lower rates, but the company could not immediately say how much.
ARRP had pushed for a 10 percent return on equity, but was pleased to come close to that. "It's long overdue. It's something AARP has been fighting for all year," Associate State Director Anne Hails said.
She said it's too soon to predict what the savings might be for customers because the commission made changes to the company's cost control plan that were not discussed in the public meetings, and the changes will take away some of the savings realized from the lower return on equity.