Alabama utility commission allowed to hike prices behind closed doors, judge rules

MONTGOMERY, Ala. — Alabama's utility regulators can continue to hold closed-door meetings to determine price hikes, in an apparent departure from common practices in neighboring states, a circuit court judge ruled.

The decision on Monday rejected a lawsuit filed by Southern Environmental Law Center on behalf of Energy Alabama, a nonprofit that advocates for renewable energy sources. The watchdog group was denied access to two meetings in 2024 where the public service commission decided how Alabama Power — the state's largest electricity provider — should adjust prices based on volatility in global fuel costs.

The lawsuit argued the denial flouts both local regulations and regional norms.

Montgomery circuit Judge Brooke Reid ruled against the environmental advocates in a one-page order after a hearing in June. She said the group's rights had not been substantially violated. At the June hearing, Reid said the commission's ''interpretation of its own rules should be given deference.''

Christina Tidwell, a senior attorney for the Southern Environmental Law Center, blasted Reid's decision in a statement on Monday.

''While other Southern states have meaningful public engagement in fuel cost proceedings, Alabama Power customers will continue to be shut out of the process,'' Tidwell wrote.

The Alabama Public Service Commission has rules that govern how Alabama Power can change electricity prices to offset increases in fuel costs, which tend to be volatile. Those rules say that the public is entitled to hear evidence and participate in proceedings that adjust fuel costs to ensure these changes are ''just and reasonable.''

The lawsuit said there have been only two public fuel cost hearings since the commission's current rules were adopted in 1981. By contrast, the Georgia Public Service Commission, which regulates a sister company of Alabama Power, has held at least 26 public formal fuel cost proceedings, according to the complaint.

The last public meeting in Alabama was called because the 2008 financial crisis caused fuel prices to skyrocket rapidly, according to attorneys for the state commission. They argued that the commission hasn't technically initiated a new proceeding since that change 16 years ago, even though rates have been adjusted over 15 times since then, so they are not compelled to invite public input.

Attorneys for the state also argued that the public has ''plenty of opportunities for input'' even without public meetings, because the commission publishes monthly reports on fuel prices online, and rate changes are subject to public appeal.

Alabama Power is a subsidiary of Atlanta-based Southern Company, which reported $4.4 billion in profit in 2024, according to annual shareholder reports. Alabama Power serves about 1.5 million of the state's roughly 5 million residents.

Most Alabama residents get electricity through municipal or cooperatively owned utilities. In 2023, the average Alabama Power consumer was paying about $159 per month, compared to the statewide average of approximately $132 per month, according to the most recent data from the U.S. Energy Information Administration.

Alabama Power did not respond to an emailed request for comment on Wednesday afternoon inquiring about recent rates.

After the ruling, Energy Alabama's executive director Daniel Tait said in a statement that the decision was ''disappointing'' for ''Alabamians who have no choice but to pay the high cost of fossil fuels on their Alabama Power bill.''

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Riddle is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.