MONTGOMERY, Ala. (AP) - Alabama Power Co. has scaled back its rate hike request at the Public Service Commission.
The power company negotiated with its largest customers over the rate hike and unveiled a new proposal today at a public hearing before the PSC in Montgomery.
The new proposal would cause 1,000 kilowatt hours of electricity for residential customers to go up $9.30 rather than $16.45.
The commission will meet Oct. 7 to consider the new rate.
If approved, it will go into effect Oct. 9. The PSC guarantees Alabama Power that it will recover through its rates the amount it spends on fuel.
But through July, Alabama Power had spent $239 million more on fuel than it had recovered through its rates.
Alabama Power had asked the PSC to approve a 14.6 percent rate hike for residential customers, 16 percent for commercial customers, such as retail stores, and 24.8 percent for industrial customers.
That would have allowed Alabama Power to recover the $239 million shortage in one year Alabama Power's largest customers, including steel mills and other manufacturers, negotiated with the power company to spread out the recovery of the shortfall over two years.
The agreement means a smaller rate hike: 8.24 percent for residential customers, 9 percent for commercial customers, and 14 percent for industries.
Under the proposal, rates could change again in October 2010.
For residential customers, the original plan would have raised the cost of 1,000 kilowatt hours by $16.45 to $129.35.
Now, the increase would be $9.30 to $122.20.