Alabama’s utility regulator has asked Alabama Power to stop passing advertising costs on to customers immediately, rather than waiting for a law banning the practice to take effect in 2029.
The Alabama Public Service Commission made the request during a meeting on Tuesday, calling on the state’s largest electricity provider to voluntarily exclude all advertising expenses from the rates it charges households and businesses.
Alabama Power supplies electricity across about two-thirds of the state and is permitted under current rules to recover half of its non-public-safety advertising costs from customers. Its adverts promote issues including reliability and customer service, while recent television commercials have highlighted a rate freeze announced late last year amid criticism of rising electricity prices.
Commission president Cynthia Lee Almond brought forward the motion after the electricity division’s regular report. It was not included on the meeting agenda.
“I don’t see any reason why we shouldn’t go ahead and take steps now to begin that process, rather than waiting until Jan. 1, 2029,” Ms Almond said.
Her motion requested that Alabama Power consent to excluding all advertising expenses from retail rate-setting until the end of 2028. If accepted, the change would be reflected in the company’s Rate Stabilization and Equalization filings for 2027 and 2028.
Commissioners Jeremy Oden and Chris Beeker IV voted in favour after a brief discussion.
Alabama Power advertising costs
Company filings with the Federal Energy Regulatory Commission show that Alabama Power spent more than 6 million dollars on general advertising last year, equivalent to about four dollars per customer. The filings do not make clear how much of that cost was passed on to customers or how much could be affected by the new prohibition.
Alabama Power did not immediately respond to a request for comment.
Daniel Tait, executive director of Energy Alabama, said the move would benefit customers who had faced some of the highest electricity bills in the country in recent years.
“We are grateful for the leadership of President Almond and the full commission for acting to end customers paying for Alabama Power’s advertising,” Mr Tait said. “Once in place, Alabama will have one of the strongest customer protections in the nation on this front.”
A state law passed earlier this year will prevent Alabama Power from including the cost of the commercials in customer bills, but the measure does not come into force until 2029. Under the commission’s request, the company would cover the costs from corporate profits before then.
The decision is among the final actions of the commission in its current three-member form. From January, it will expand to seven members, with four new commissioners appointed by outgoing governor Kay Ivey.
Ms Almond will be the only continuing member of the current commission. Mr Oden and Mr Beeker are due to leave after losing Republican primary contests, with Cullman County Sheriff Matt Gentry and former state auditor and commissioner Jim Zeigler set to replace them.
