PSC Hearing Wraps Up. Decision on Alabama Power’s $1.1 Billion Expenditure Not Likely Soon.

James M. Barry Plant in Mobile County

Testimony wrapped up Wednesday in a Public Service Commission hearing on Alabama Power Company’s bid to spend $1.1 billion to add new energy sources. The company and opposing groups were asked to submit legal briefs by April 17 to support their views on how administrative law judge John A. Garner should rule in the matter.

A decision is not expected until summer, and further delay is likely if the ruling is challenged in circuit court.

The judge heard witnesses for both sides over a three-day period in which sessions lasted well into the evening at the PSC offices in Montgomery.

Expert witnesses sparred over the power company’s petition to add 2,400 megawatts of new capacity, most of it from natural gas sources, the rest from solar panels with battery storage and efficiency programs.

The utility said it needs the ability to generate more power to cover electricity needs of its industrial and residential customers, particularly as use of power has increased in winter. It said this would help the company maintain a 26% reserve margin of energy capacity so it can reliably avoid blackouts.

In cross examination and testimony, opposition groups – including industry, environmental and clean energy organizations – sought to prove Alabama Power does not need that much of a reserve margin or the nearly 20% increase in energy-generation capability.

In a news release after the hearing, Daniel Tait, chief operating officer of Energy Alabama, said, “Alabama Power simply did not produce the evidence it needed to justify such an unprecedented expense,” and its claim to need so much of a reserve margin “is drastically out of line with other utilities.”

In a later email, Tait added, that the company’s claim to need a 26% reserve margin for “winter reliability … is unsupported by the evidence and drastically out of line with other utilities.”

Energy Alabama is an advocate for solar and other energy sources not derived from fossil fuels. Tait said Alabama Power’s solar-plus-storage projects “are saving customers money, and the (proposed) gas plants are costing customers money.”

The power company has estimated the average residential customer’s bill would increase $4 a month if all its proposed projects are approved by the PSC. Alabama Power has pointed out the increase would be spread over a four-year period as projects come to fruition, and that its prices were reduced this year by an estimated 3%, or about $4.50 a month.

Company public relations official Michael Sznajderman has said that about 90% of the requested 2,400 megawatts of capacity “would replace generation that we have retired or energy contracts that will likely not be available to it soon.”

In a news release today, clean air advocacy group Gasp questioned the utility’s proposal to increase its use of natural gas, a fossil fuel, while its parent company, Southern Company, has a low-to-no carbon pledge for the future. Executive Director Michael Hansen said that Alabama Power’s proposal is “the wrong path for Alabamians looking for lower electric bills and a more sustainable (power) grid … . This proposal simply doesn’t reflect the world we’re living in and won’t get us to a lower carbon future we urgently need to reach.”

The Southern Environmental Law Center represented Gasp and Energy Alabama. Staff attorney Christina Andreen Tidwell said in a news release, “Alabama Power’s own analysis shows that clean energy is the more affordable alternative, yet is pushing for a massive amount of new, expensive capacity for which Alabamians will be on the hook for decades.”