The typical monthly bill for an Alabama Power customer will be reduced by more than $9 beginning in July – the first portion of $337 million in savings coming to all Alabama Power customers from federal tax reforms.
The reduction to all customer bills through 2018 totals $257 million. It will be followed by $50 million in reductions next year. Customers will also see fuel costs reduced by $30 million, for a total $337 million in benefits. The savings will also help offset changes in fuel expenses related to providing reliable service to customers.
“Alabama Power is pleased to reduce our customers’ bills as a result of the recent changes in federal tax laws,” said Richard Hutto, Alabama Power vice president of regulatory affairs. “This will benefit customers and Alabama businesses, and help continue to grow our state’s economy.”
In addition to the customer bill reductions and fuel benefits, Alabama Power has committed to not increase base rates for the next two years, through 2020, following a vote Tuesday by the state Public Service Commission. Commissioners also modified the rate system that governs Alabama Power – lowering the top of the range of return the company can earn and revising how revenues are refunded when the company goes above the range.
The federal tax reform legislation, approved late last year, lowered corporate income tax rates, which reduces taxes for Alabama Power. Taxes levied on the company are passed on, so a lower tax rate directly benefits Alabama Power’s 1.4 million customers.
“The actions taken by the PSC along with the tax reforms provide savings for customers and also enable Alabama Power to better serve Alabama now and into the future,” Hutto said.