Alabama’s energy landscape
Many of the current energy issues in Alabama are focused around electricity generation, transmission and distribution. However, dramatic increases in natural gas extraction and distribution throughout the U.S. are also of critical importance. The U.S. is beginning to see a shift from coal to natural gas as a fuel source for electricity generation because of global market forces. The popular method for extracting natural gas, hydraulic fracturing, or fracking, is an extreme shale extraction technique which has implications for water use as well as other potential environmental impacts with many unanswered questions.
Alabama Power Company (APCo) and Tennessee Valley Authority (TVA), our largest electricity producers, are both relying more heavily on natural gas as a steam generator to run the turbines which produce electricity. TVA is shutting down coal plants and coal prices are being impacted significantly on the global market. Many financial institutions are showing instability because of the volatility of the markets. Both APCo and TVA are retrofitting some of their coal plants to run on natural gas while adding extremely expensive baghouses, selective catalytic reduction devices (SCRs) and scrubbers in order to cut down on pollution and improve public and environmental health.
Utilities: Energy Producers and Distributors
Electricity users comprise over 2.5 million retail energy customers in the residential, commercial and industrial sectors. They are served by 62 entities in Alabama:
· Alabama Power Company (APCo), an operating unit of investor-owned Southern Company, serving 1.4 million homes, businesses and industries in the southern two-thirds of the state, is the only regulated electric utility and accounts for 61.6% of electricity retail sales and 62.9% of the revenue (http://www.alabamapower.com/);
· Tennessee Valley Authority (TVA), a federally owned utility and its distributors, serves 9 million people in seven states, but sells directly only to large industrial firms in Alabama with 6.3% of the sales and 15.3% of the revenue – but also sells to some of the energy-distributing entities below (http://www.tva.com/news/state/alabama.htm)
· 36 municipalities accounting for just over 19% of the sales and 18% of the revenue (http://electriccities.org/members-utility.php), and;
· 24 rural electric cooperatives, which deliver power to about one-fourth of the state’s population but account for just under 13% of the retail sales and 15% of the revenue (http://www.areapower.coop/content.cfm?id=2008
State Energy Planning: Alabama needs to plan for the future
Click here for a two Page summary on Planning for Alabama's Energy Future and the IRP. The Alabama Environmental Council did a study of energy planning in other states as well as how that interacts with Integrated Resource Planning. 39 other states rely on planning processes like IRP's that give the public a voice in our energy future. At a minimum, Alabama should finish it's State Energy Plan. Alabama's Permanent Joint Legislative Committee on Energy Policy set forth the process to create a SEP in it's founding legislation, but has yet to complete this process.
Alabama’s regulatory body: the Public Service Commission (link to their site: http://www.psc.state.al.us/)
The Alabama Public Service Commission (PSC) consists of three elected commissioners. Currently, Twinkle Andress Cavanaugh serves as the President of the Commission and Jeremy Oden and Chip Beeker serve as the other two commissioners. The PSC’s mission is to ensure a regulatory balance between regulated companies and consumers in order to provide consumers with safe, adequate and reliable services at rates that are equitable and economical. The PSC regulates APCo, Alagasco and Mobile Gas. However, the public has very little access to appropriate information nor has it been adequetely represented by its assigned advocates.
Currently, Alabama is one of the only states in the U.S. that does not hold formal rate hearings for the regulated utilities. In 2013, the PSC, at the urging of then Commissioner Terry Dunn, held informal proceedings for Mobile Gas, APCo, and Alagasco’s rate structures. Any group which wanted to participate was allowed a seat at the table. No testimony was given under oath nor was formal discovery conducted. AEC takes the position that these informal proceedings were not particularly substantive, transparent or productive. The integrated resource plan (IRP), which directly concerns energy use and practices, was off limits for discussion in these proceedings. Below are statements and Op-Eds published about the recent proceedings.
PSC Adds Confusion and Speculation to Rates, Informal Proceedings Were Lacking in Transparency - Published 8-29-13 here and on AL.com
Alabamians Deserve Cleaner Energy AND A Stronger Economy - Published 7-15-13 here and on AL.com