Written by Anna Barrett, Alabama Reflector
The Alabama Senate on Thursday passed a bill that would expand membership on the state’s public utility regulator.
SB 360, sponsored by Sen. Clyde Chambliss, R-Prattville, and co-sponsored by the Senate’s other 34 members, changes the structure of the Public Service Commission from a president and two commissioners to seven members, one from each of the state’s seven congressional districts.
Chambliss said that eventually all seven members would be elected. But Gov. Kay Ivey would appoint four members by July 15, making the commission majority-appointed through 2028.
“In an ideal world, we just snap our fingers and we go from three to seven, just like that. However, we’re in the middle of an election process right now,” Chambliss said. “We want them to be staggered, two one cycle, three the next, two the next, and then it repeats so that you have continuity of knowledge and information.”
The bill would also create a state secretary of energy, appointed by the governor, who would set agendas for the commission and administer its business.
The bill comes amid mounting concerns over Alabama’s electricity rates. The U.S. Energy Information Administration said that Alabamians paid an average of 16.08 cents per kilowatt-hour in November, the highest in the South. Critics have pointed to the PSC’s use of a process known as rate stabilization equalization (RSE), which guarantees utilities a profit and limits public input into rate-making decisions. Chambliss’ bill does not address that process.
The Alabama House last month considered a bill from Rep. Chip Brown, R-Hollinger’s Island, that would have ended elections to the PSC, a bill that was later withdrawn.
A House committee on Wednesday approved a bill sponsored by Rep. Mack Butler, R-Rainbow City, that would require the PSC to hold formal rate hearings, requiring sworn testimony from utility representatives justifying rate increases. The PSC has not held a formal rate hearing since 1981.
Sharetá Collins, marketing and communications manager for Energy Alabama, a nonprofit that advocates for more renewable energy use in the state, said in a statement Thursday the group was disappointed in the bill’s passage.
“We believe Alabamians want to preserve their voice and the power of their vote for utility regulators. Alabamians are looking for legislation that will meaningfully reduce their utility bills as fast as possible,” Collins said.
Under Chambliss’ bill, two of the appointees will serve a two-year term, at which time their seat will be up for election in 2028. Another commissioner will be elected in 2028 to replace the current PSC president. The other two appointees will serve a four-year term, then be up for election in 2030. Two commissioners will be elected in November, a race where eleven people have qualified.
“Every corner of the state should be represented on the PSC. This bill will correct that,” Chambliss said. “It’ll take a little time, and the encouragement is for those lists of names to come from all corners of the state.”
Senate Minority Leader Bobby Singleton, D-Greensboro, said on the Senate floor that some people have come to him saying the bill takes away their right to vote for commissioners.
“That couldn’t be farther from the truth. This bill does not do that,” Singleton said. “It actually gives them more people to vote for and more individualized than statewide people ability to be able to be represented that weren’t represented.”
Chambliss said that the changes to the commission are necessary because Alabamians’ electricity rates are higher than most of the nation’s, and that was not the case 20 years ago. He did not specify how the bill would lower rates.
“The people are fed up with paying high power rates. That’s what has brought it to the forefront,” Chambliss said. “We’re increasing in power rates way faster than everybody else. That’s the problem. We know we have inflation. We know things go up over time, and if our inflation for power was similar to our neighboring states, I don’t think we’d be talking about this today.”
The bill also prohibits electric utility companies from increasing the retail base rate for power until 2029, when Chambliss said most of the commission would be elected. It also prohibits utility companies from passing on the costs from issuing grants, lobbying and advertising onto consumers after that.
Senate President Pro Tem Garlan Gudger, R-Cullman, said in an interview after the Senate adjourned that he cannot prove that utility companies are doing that now, but wanted to put everything into one bill.
“We did want to go and try to make it move a little bit faster, because we’re getting to the end of session,” Gudger said. “I feel like, as we move into this, the commissioners that will end up being elected are going to make the right decisions for the people of Alabama, and that’s really where the rates will be reduced.”
SB 360, like HB 392, requires the PSC to hold a public hearing each year on rates, but does not require it to be a formal hearing and allows the Secretary of Energy to set the agenda for that hearing.
“We did the same thing on the Joint Prison Oversight Committee. What we heard from the people in that meeting, has led to several pieces of legislation since then,” Chambliss said in an interview after the Senate adjourned. “We think the communication from the people directly to the PSC members will cause the same thing to happen, and it will have the same effect. That’s how we’re trying to handle that.”
Chambliss said that even though the Secretary of Energy will be in charge of setting agendas for the commission, five commissioners can overrule the secretary and the secretary does not have voting power.
The Senate adopted an amendment to Chambliss’ bill by Singleton that allows employees that were appointed by a commissioner to continue to work without their appointing authority.
“These are state employees that are over there and have institutional knowledge of how the public service commission works, and we don’t just want to put them in jeopardy of just wiping everybody out and starting all over,” Singleton said.
The amendment was adopted 33-1.
The Senate passed Chambliss’ bill 32-0. It moves to the House.
