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Alabama Power rates rising by 5.6 percent

MONTGOMERY (AP) — Alabama Power Co. customers will pay more per kilowatt-hour starting next month after the Public Service Commission approved the utility's request to raise rates by 5.6 percent, the second increase this year.

Commissioners Jim Sullivan, Jan Cook and Susan Parker voted unanimously Monday to allow the company to increase an energy cost recovery charge from $24 per 1,000 kilowatt-hours of electricity to $31 beginning July 1. The power company also announced it will reduce a monthly disaster reserve charge from $2.48 to 75 cents.

Below-normal rainfall this year and last year reduced power production from Alabama Power's dams, forcing the utility to burn more coal and natural gas at other power plants to make up the difference, officials said.

Parker said the company's switch to other fuels has cost an extra $180 million over the last 18 months.

After taxes, which vary by usage, the total increase in the energy cost recovery charge for residential customers will be $7.37 per 1,000 kilowatt-hours, the amount of electricity a typical residential customer uses in a month. The net increase drops to $5.59 per monthly bill when the savings from the disaster reserve charge and reduced taxes are factored in.

Boost in annual bill

That will raise a typical residential customer's annual bill by $67.08, from the current annual cost of about $1,208 to about $1,275 for 12,000 kilowatt-hours, company spokeswoman Jan Ellis said.

Alabama Power rates increased by 5.29 percent Jan. 1, boosting average monthly bills by $5.48, similar to the latest boost.

PSC spokesman David Rountree said the commission has allowed the monthly disaster reserve charge of $2.48 since early 2006, partly to recoup about $42 million the company spent to restore power to customers after Hurricane Katrina and other storms. That $42 million will be repaid by the end of this month, he said.

Zeke Smith, a vice president with Alabama Power, said the monthly 75 cents will be collected for another disaster reserve fund that now totals about $20 million. The company can keep collecting that charge until the reserve reaches $75 million.

The PSC estimates that Alabama Power as of last month had paid about $360 million more for the coal and other fuel it burns at its power plants than it had collected over several years in energy cost recovery rates.

Raising the energy cost recovery charge to $31 per 1,000 kilowatt-hours will pay ongoing fuel costs and repay the company that $360 million in 30 months, Smith estimated. Alabama Power has about 1.4 million residential, commercial and industrial customers statewide.

The company last year collected $5.015 billion in revenues and earned a net income, after operating expenses and income taxes, of $542.5 million, The Birmingham News said, citing the company's annual report for 2006.

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Information from: The Birmingham News

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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