Smith Lake Topics: Electricity Rate Increase
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Name:
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waterph
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Subject:
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Electricity Rate Increase
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Date:
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9/24/2008 1:22:38 PM
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I read in the Birmingham paper this AM of a rate increase by APC. Parts of the article are posted below.
" • Alabama Power amends proposed rate increase by 8.2 percent, instead of 14.6 percent
MONTGOMERY - Alabama Power Co. on Tuesday scaled back a proposed record rate hike and is seeking an increase that would mean $9.30 more a month in electricity bills for a typical household.
Alabama Power originally sought a 14.6 percent rate increase for residential customers, which would have meant a $16.45 monthly increase for a homeowner using 1,000 kilowatt-hours each month. But on Tuesday, Alabama Power reduced the proposed residential increase to 8.24 percent, meaning the homeowner would pay an additional $9.30 more each month.
Alabama Power Co. is seeking the increase to pay for the rising costs of fuel, mainly coal that it burns in power plants, company spokesman Michael Sznajderman said. As of July, the company had nearly a quarter of a billion dollars in unrecouped fuel costs, Sznajderman said."
A few questions for members of the forum.
1. Why did APC ask for a rate increase of 14.6% and settle for a rate of 8.24%? Apparently, the three members of the Public Service Commission saw through this pretty fast. Was the 14.6% ever an appropriate rate to request? Might this be an attempt to "gouge" their customers? How many other suppliers do we have as a source for electricity? None!
2. The rate increase was justified on the basis of higher coal cost - $250 million. Does this mean that the coal companies supplying APC increased their earnings by $250 million? I doubt this! Did miners pay increase an equivalent amount during the past year? How much of APC's coal is supplied from mines in Alabama?
3. Does APC not have long term contracts for coal? This $250 million sounds like APC is buying on the "spot" market. Again, I doubt this! I'll bet that APC has long term contracts for coal and have had for many years.
I guess that the property owners on Smith Lake can learn to live with changing electricity rates in a manner that we have for water level. Live with it!
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