Alabama Power has unveiled a comprehensive plan aimed at keeping electricity rates stable for customers through the end of 2027, marking one of the utility’s most significant long-term commitments to price predictability in recent years. The initiative was formally presented to the Alabama Public Service Commission (PSC) on November 21, 2025, signaling the company’s intent to prevent sudden bill increases at a time when many households and businesses are already struggling with rising living costs.

According to documents filed with the PSC, the plan outlines multiple strategies designed to control rate impacts across the next two years. Alabama Power says it has been working closely with PSC staff and the Alabama Attorney General’s Office to evaluate projected operational and compliance costs for 2026 and 2027. The outcome of those discussions is a proposal that focuses heavily on deferring specific rate adjustments tied to environmental compliance, new generating facilities, and fuel expenses.

At the center of the proposal is the company’s Rate CNP structure, which is divided into three components:
• Part A, which covers costs associated with constructing new power plants or major infrastructure;
• Part B, which addresses additional power supply expenses;
• Part C, which reflects environmental compliance obligations.

Under the new plan, Alabama Power intends to freeze Part C rates through late 2027, preventing potential increases driven by evolving federal environmental regulations. In addition, any Part A adjustments will be postponed until January 2028, meaning customers will not immediately absorb costs linked to the company’s recent acquisition and future facility upgrades. Meanwhile, Part B will remain unchanged until March 2028, creating an extended period of price consistency for consumers.

The utility further proposes to extend the interim Environmental Cost Recovery factor through 2027. To achieve these goals without compromising service quality, Alabama Power says it will rely heavily on internal cost controls and operational efficiencies. The company is also asking the PSC to allow customer refunds associated with the 2025 Rate RSE calculation to be redirected to the Natural Disaster Reserve—an account currently in deficit due to recent storms and emergency repairs.

Another key element of the utility’s financial strategy includes tapping into federal nuclear production tax credits from 2025 through 2027. These credits are expected to help offset retail power costs and ease overall rate pressure.

In public statements, Alabama Power emphasized that its plan is centered on customer relief. Responding to inquiries from ABC 33/40 and Alabama Public Radio, company officials acknowledged the economic challenges many Alabamians face. “Budgets are tight, and power bills are a real concern for many families and businesses,” the statement read. “This filing outlines commitments aimed at providing more certainty and predictability around electric rates as other expenses continue to rise.”

The company maintains that the proposal will not compromise reliability, noting that investments in grid stability and generation capacity remain priorities. Alabama Power says it intends to continue discussions with regulators in hopes of securing approval in time to implement the rate freeze seamlessly.

Still, the plan is not without variables. Weather patterns, natural disasters, and fluctuations in fuel markets could influence the utility’s long-term projections. The PSC will review the filing and determine next steps during its upcoming public meeting scheduled for December 2 in Montgomery.

The decision from the PSC will ultimately shape how Alabama Power navigates cost pressures while maintaining consistent service across the state.

 FAQ

1. What exactly is Alabama Power proposing?
The company is proposing a multi-year freeze on several rate components to keep electricity bills stable through 2027.

2. Will customers see their bills increase during this period?
If approved, the proposal is designed to prevent increases tied to environmental compliance, fuel costs, and new facility expenses.

3. Why is the company delaying adjustments until 2028?
Delaying adjustments helps spread out costs and prevents immediate rate hikes for customers.

4. How will Alabama Power fund this freeze?
Through cost-cutting measures, federal nuclear production tax credits, and redirecting eligible customer refunds to the Natural Disaster Reserve.

5. When will the PSC make a decision?
The proposal is under review, with discussions continuing during the PSC’s next public meeting.