Alabama Power Faces Criticism Over Advertising Expenses Billed to Customers

Alabama Power, the largest electricity provider in Alabama, has been under fire for its aggressive advertising campaigns, which have cost customers dearly on their electric bills. The company's extensive marketing efforts have raised eyebrows among consumers and regulators alike.

The ads, which tout the utility's reliability and customer service, are a regular feature on local television stations and online platforms. However, critics argue that these commercials should not be borne by customers through higher electricity rates. In response to mounting pressure, the Alabama Public Service Commission recently requested that Alabama Power voluntarily stop billing customers for advertising expenses.

The company's advertising budget is substantial, with over $6 million spent last year alone on promoting its various business aspects. This significant expense has been a point of contention among regulators and consumer advocates who argue that it unfairly burdens low-income households and small businesses that are already struggling to pay their electricity bills. Alabama Power's extensive reach covers about two-thirds of the state, making it a monopoly in the region.

As part of a new state law passed earlier this year, Alabama Power will no longer be allowed to include advertising costs on customers' electric bills from 2029 onwards. However, this change does not address the millions already spent by the utility, which will instead have to absorb these expenses through its corporate profits. This shift in policy is set to take effect several years from now, leaving customers to continue footing the bill for the company's advertising efforts until then.

A motion was made by PSC President Cynthia Lee Almond during a recent meeting to ask Alabama Power to voluntarily exclude non-public safety advertising costs from being billed to customers immediately.

Almond's suggestion came after the regular report from the commission's electricity division and was not on the agenda, but she argued that there was no reason to wait until 2029 for this change.

She proposed that if Alabama Power agreed to this request, it would be reflected in its rate filings for 2027 and 2028.

Commissioners Jeremy Oden and Chris Beeker IV voted in favor of Almond's motion after a brief discussion.

The move to stop Alabama Power customers from paying for half of the company's advertising expenses has been met with relief by Energy Alabama, an organization that advocates for affordable energy options for residents.

Executive director Daniel Tait hailed the decision as a significant victory for consumers who have long shouldered the burden of high electric bills in the state. With this change, Alabama is poised to become one of the leaders in customer protection nationwide when it comes to utility advertising costs.

The commission's action marks the beginning of a new era in the Public Service Commission, which will undergo a significant overhaul next year. The number of commissioners is set to increase from three to seven, with four new members taking office in January as part of Governor Kay Ivey's appointments.

These newcomers include two historic firsts for the commission: its first-ever Black members. Meanwhile, Commissioner Jeremy Oden and Chris Beeker IV will be leaving their positions on the commission after being defeated in Republican primaries.

Zeigler's return to the commission marks a significant shift in leadership after four decades.

The new seven-member commission will be overseen by the state's first secretary of energy, who will be appointed by Gov.-elect Tommy Tuberville. This individual will set the agenda for the commission and have significant influence over its decisions. A vote of five out of seven commissioners will be required to override any decision made by the secretary.

A key factor in selecting the new secretary is that they must have experience in utility regulation or energy policy, as specified by state statute. Despite this requirement, Tuberville has yet to announce his choice for the position, leaving uncertainty surrounding who will lead the commission in its new form.