Is Alabama Power a monopoly?

The Alabama Public Service Commission (PSC). The PSC regulates Alabama Power by reviewing filings, setting the rules that govern rates and overseeing the rate framework over time. In a regulated model, changes are usually incremental rather than sudden. Under the current PSC-approved framework, rates will remain steady through 2027.

No. Rates are based on the cost of providing service and are set through a public regulatory process. The Rate Stabilization and Equalization (RSE) framework is the PSC-approved structure that governs how Alabama Power's rates are reviewed and adjusted over time. Under RSE, the PSC sets the rules, reviews the company’s costs and earnings, and determines whether any changes are needed. The framework is designed to keep rates stable and predictable rather than subject to sudden increases. If the company’s earnings fall outside the approved range, the framework includes built-in mechanisms to address it – without requiring a traditional rate case each time - while remaining within the PSC’s oversight process. Rules, orders and company filings are publicly available on the PSC website.

It means Alabama Power is required to build, maintain and operate the infrastructure needed to deliver electricity to every customer in its territory – whether that’s a neighborhood in Birmingham or a home on a rural road. The company cannot pick and choose. In a deregulated market, providers can focus on profitable areas and leave costly-to-serve areas behind. The regulated model prevents that.

The PSC holds public meetings every month that are open to the public. In those meetings, commissioners and staff routinely review Alabama Power’s financial records and discuss summaries. The PSC posts its public meeting schedule on its website. For deeper detail, PSC dockets also include public versions of rules, orders and filings.

Deregulated markets can be cheaper for some customers at some times, but they can also shift more price risk onto customers. During Winter Storm Uri (February 2021), Texas wholesale prices spiked for days, and some customers on certain variable-rate plans faced very large bills. (U.S. Energy Information Administration) Alabama uses a regulated model where the PSC oversees rates and the planning framework, which prioritizes stability over customer-by-customer exposure to market swings.

Public power means a city or public district owns the utility. It is still a single-provider system with one set of poles and wires. Bills still reflect the cost to generate or buy power, maintain the grid and invest ahead of storms and growth. Converting a served area to public power typically requires buying the existing system and funding separation and start-up costs, which can take years and add major expense.

Your home is connected to one local system of poles and wires. Your local electric company maintains it, restores it after storms, and is accountable to service standards. In Alabama Power’s area, the PSC reviews and approves rates and service standards through a public process.