Montgomery Court upholds exclusion of renewable energy advocates from rate process

A judge earlier this month ruled that an organization that advocates for renewable energy use in Alabama may be excluded from a process that partially determines energy rates in the state.

Montgomery Circuit Court Judge Brooke Reid ruled on July 7 that the Alabama Public Service Commission could prevent Energy Alabama from intervening in a docket that set the energy cost recovery (ECR) rate that Alabama Power charges to customers for the fuel it pays to provide electricity.

The order stated that the PSC did not make its decision based on fraud or reached a decision that did not align with the evidence. Those two factors are the only avenues, based on Alabama law, that the court could have reversed the ruling made by the PSC, according to the ruling.

“We are really disappointed to learn about that ruling,” said Daniel Tait, executive director of Energy Alabama in an interview last week. “Ultimately, this keeps the door shut on public participation for fuel costs, which is a huge portion of regular people’s bills.”

Energy Alabama is currently considering its options for challenging the court’s decision.

A message was sent Monday to Alabama Power seeking comment. The PSC declined comment, citing ongoing litigation.

The rate ECR allows Alabama Power to recoup money paid to vendors to provide the fuel for energy generation through a fee applied to customers’ bills.

Modifying the rate ECR requires a proceeding that includes a public hearing that allows third parties to intervene.

The proceedings are all part of the one docket that Energy Alabama sought to intervene. The proceedings in that docket have been closed since 2008 even though the rate ECR continues to be adjusted.

“However, over the more than four decades of the operation of Rate ECR, the Commission has also regularly relied on interim consent orders to temporarily adjust the ECR Factor below the factor approved through one of the noted proceedings,” the PSC said in its court filings. “These temporary adjustments were administrative actions rather than products of proceedings.”

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The PSC adjusts the rate ECR every month at times depending on the price of oil, gas and uranium depending on the type of fuel that the plant uses to generate electricity.

In May 2024, the PSC directed Alabama Power to reduce the rate ECR from $3.27 per kWh to $3.01 per kWh, according to a filing from Alabama Power with the Securities and Exchanges Commission.

Energy Alabama filed a petition with the PSC to intervene in the docket even though the utility regulatory body sought to reduce the rate ECR. Should Energy Alabama be allowed to intervene, it could then request discovery documents and data to obtain additional information on the company’s decision to adjust the rate ECR.

“The rate changes all the time, but just because it goes down doesn’t necessarily mean the public shouldn’t have an input, or that it could not have gone down even more, for instance,” Tait said.

The PSC denied Energy Alabama’s request in August, saying there was no proceeding that allowed it to intervene. The final decision in the docket traced back to 2008.

Energy Alabama filed a request again to have the PSC reconsider its decision, which the PSC again denied in November. That then prompted Energy Alabama to appeal the decision to the Montgomery Circuit Court.

“The Commission’s orders are contrary to the substantial weight of the evidence and prejudice Energy Alabama’s substantial rights, and those of all affected by Commission proceedings who are entitled by law to transparency and input, by preventing intervention and participation in the Rate ECR docket,” the Southern Environmental Law Center said in a filing with the court, the organization representing Energy Alabama, in February.

The PSC said that there are no proceedings happening, and that the adjustments are a series of temporary measures that are made administratively in collaboration with Alabama Power.

Energy Alabama disputes that.

“Logically, the issuance of a consent order by the Commission and the Company’s confirmation of consent, resulting in a binding agreement changing the ECR Factor and directly impacting customers, is a proceeding,” Energy Alabama said in its court filing. “Paradoxically, however, the Commission seeks to preclude intervention or public participation by unilaterally declaring this mechanism is not a proceeding.”