HB 475 Moves Forward on PSC Rate Hearing Reform
Revised bill would require regular PSC rate hearings and bar utilities from charging customers for lobbying and political spending
A proposal to increase oversight of Alabama’s electric utilities moved forward this week as lawmakers advanced a revised version of House Bill 475 (HB475), legislation that would require regular rate hearings before the Alabama Public Service Commission.
The bill, sponsored by Mack Butler (R-Rainbow City), would require the PSC to conduct a formal rate case for electric utilities at least once every three years. The hearings would place utilities under oath and give regulators subpoena power to compel testimony and documents.
HB475 passed the House Transportation, Utilities and Infrastructure Committee with only a single “no” vote from Rep. Napoleon Bracy (D-Pritchard), leaving Rep. Butler “optimistic“ about the bill’s chances.
Butler said the goal is to bring greater transparency to how power rates are set in Alabama.
“I am 62 years old. The last time the PSC had a public rate case hearing, I was still in high school,” Butler told WBRC. “Under my bill, (the PSC) would have subpoena power, and all the cards would be laid on the table. The utility is going to have to go under oath during this, which is going to be huge. If they can justify their record profits, so be it.”
Butler also pointed to regional cost comparisons as part of the push for reform.
“There's something clearly wrong, when we're the highest in the region, third highest in the nation, and about 40% higher than TVA,” Butler said.
The substitute version of HB475 also limits the types of expenses utilities may pass on to customers through electric rates. The proposal would bar companies from including lobbying costs, political spending, and trade association dues when calculating rates.
Supporters say the change reinforces the idea that customers should pay for electric service — not political activity.
“Prohibiting political spending and other non-operational costs from being passed on to customers reinforces a simple principle: electric bills should cover the cost of providing electric service, not lobbying, political activity, or unrelated expenses,” said Energy Alabama in a statement supporting the legislation.
The organization also called the bill a step toward greater transparency at the PSC.
“HB475 starts fixing that,” Energy Alabama said. “Energy Alabama supports HB475, as substituted, as an important step toward lowering electric bills, greater transparency, and stronger accountability at the Alabama Public Service Commission (PSC).”
The measure would also require the PSC to review utilities’ return on equity and align it with national averages, another provision supporters say could help control rates over time.
HB475 was debated in the House Transportation, Utilities and Infrastructure Committee, Chaired by Steve Clouse (R-Ozark). Lawmakers discussed several revisions before advancing the substitute version for further consideration.
HB475 now goes to the House, where it will need to be brought to the floor by leadership — an action that is by no means certain to occur. HB475 also faces a competing bill, SB360, that would significantly alter the PSC as well, but in significantly different ways than HB475.
SB360 has already been praised by Senate President Pro Tem Garlan Gudger (R-Cullman), but many regard it as a flawed bill.
Regardless of which bill is passed this session, it seems likely that Alabama’s PSC — and the utilities it regulates — will face substantial changes going forward.
