Alabama Power is Bad for Business

Guest Opinion by John Dodd, Policy Manager for Energy Alabama

This past weekend, the Business Council of Alabama's annual conference lost the thread on what actually counts as economic development. And it’s not if Publix is carrying the right sausage rolls. Alabama's public officials talk about the state's business and industrial success like we're on the national forefront. In reality, we're taking victory laps while being merely average. Alabama landed at No. 21 in CNBC's 2026 Top States for Business rankings. But it's worth remembering Alabama was ranked fourth as recently as 2019. Dropping seventeen spots in seven years is not growth. And no amount of press releases from Montgomery changes what the numbers actually say.

Recently, Gov. Kay Ivey took to social media to celebrate Alabama winning the Silver Shovel Award, crediting the $6 billion Eli Lilly plant and U.S. Space Command's permanent headquarters in Huntsville for the state's success. This is a huge accomplishment for a state that depends on these developments for growth. But look closer, and you’ll see a pattern: "Huntsville", "Madison County", "North Alabama". Again and again, the state's biggest business wins keep landing in the one portion of Alabama that is served by TVA. Which leads me to ask, is Alabama experiencing an economic development problem, or an Alabama Power problem?

There's one ranking you won't catch anyone in Montgomery bragging about. Duke University's Nicholas Institute for Environmental Policy Solutions scores Southeastern states on power-sector competitiveness, and Alabama finishes dead last, 12th of 12. 

Essentially, this ranking asks whether a state's power system actually lets businesses, communities, and independent producers compete, negotiate, and make real choices that can lower their costs. Duke's researchers measure things like whether customers have any real options for where their power comes from, whether smaller or independent generators can get a fair shot at the market, and whether a state's rules actually invite investment and competition or just protect their monopoly utility from having to answer to anybody. Alabama scored 22.4% against a regional average of 42.88%, landing in the lowest competitiveness tier of every state Duke measured. 

Southern Company, the parent company of Alabama Power, also plays a large role in Alabama’s troubling national competitiveness rankings. Southern has spent the last twenty-five years lobbying against transmission buildout, which undercuts the exact factor site consultants say matters most. In 2000, Southern proposed its own for-profit transmission company rather than join a real regional grid operator, like the majority of other utilities did. The Federal Energy Regulatory Commission rejected it and told Southern to join an actual regional transmission organization (RTO) instead. Southern never complied, and two decades later they sloppily presented their own Southeast Energy Exchange Market, a much smaller bilateral trading arrangement. Former FERC Commissioner Allison Clements dissented from approving it, calling it "a discriminatory, preferential pool that favors its own members." 

This pattern held when the Department of Energy studied where the national grid needed new transmission capacity. Southern told regulators congestion couldn't even be calculated in a non-RTO region, then opposed DOE studying the question at all. Now FERC Order 1920 requires utilities to actually plan two decades out instead of patching year to year. Alabama Power's response has been filing bare-minimum compliance through a planning body Southern Company runs itself, instead of joining a real, independently operated market. For a company deciding where to put their business that can demand 100+MW, that's a warning sign. 

Renewable energy access in Alabama Power's territory tells a similar story of self-inflicted damage. Most folks are already aware of Alabama Power’s “solar tax” that applies to homeowners who generate their own electricity using rooftop solar. In 2024, Alabama Power took their regressive policies a step further after winning the PSC’s approval for a new fee, the Variable Integration Cost. This fee was placed on large-scale, third-party-owned solar projects, the industrial kind that would actually power a plant or a data center. For an 80 MW solar farm, the fee penciled out to roughly $250,000 a year, approved with no public hearing, and it landed squarely on projects tied to Meta's own clean-energy commitments for its Montgomery data center. Energy Alabama intervened in that proceeding with the intent to challenge the fee. Alabama Power backed down and reversed it.

Alabama Power will tell you, every chance they get, that they're an economic engine for this state. Drive to any major sporting event or networking conference in Alabama and you will find their logo somewhere on the wall. It's a very successful strategy that works in their favor because most Alabamians never stop to ask who's actually paying for it or if it is even true. You are paying for it! 

Buried in Alabama Power's own rate tariff is a provision recognizing advertising expenses as an allowable cost for ratemaking purposes, a standard the Alabama Supreme Court upheld back in 1978. Alabama Power even confirmed this in a 2023 PSC annual meeting when company representatives told attendees they charge customers for 50% of advertising costs and 100% of costs that it claims benefits customers. Promoting economic development falls under the 100% umbrella. So every ad touting their “rate freeze”, every sponsorship dressed up as "building Alabama's future," likely gets justified internally as a customer benefit, which means it can get built into what you pay every month.

Alabama Power is hindering Alabama from unlocking its full potential in attracting new industry and business to our state. A grant for a local film festival doesn't build a manufacturing line. A logo on a scoreboard doesn't create a single job. What actually recruits industry to this state is a power grid that's affordable, resilient, transparent, and built to grow. Alabama Power and its parent company and other Southern Company affiliates are failing to deliver that, while spending your money to make sure you don't notice. So, let me repeat the question, is Alabama experiencing an economic development problem or an Alabama Power problem?"

Energy Alabama is a nonprofit membership-based organization advancing Alabama’s clean energy future through education and advocacy since 2014. For more information, visit https://energyalabama.org.

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