Alabama Power reports $2.6 billion profits while dodging tighter regulations

Alabama Power avoided a push for tighter regulation while posting record profits, thanks to a combination of legislative maneuvering and the utility’s long‑standing influence over the state’s electric market. In a recent session of the Alabama Legislature, lawmakers passed a package that kept the utility’s rate‑increase proposals intact, even as consumer advocates and environmental groups demanded stricter oversight and a shift toward renewable energy. The result is a utility that earned more than $2.6 billion in profit last year, a 12 percent rise over 2022, while Alabama’s average electricity cost remains among the highest in the South.

The move matters because Alabama’s electricity market is heavily dominated by a handful of utilities, with Alabama Power— a Southern Company subsidiary— controlling about 90 percent of the state’s distribution network. The state’s Public Service Commission (PSC) is the regulator that approves rate hikes, but its decisions are often swayed by lobbying from the utilities. In 2023, the PSC approved a 5.4 percent rate increase for the next three years, citing the need to fund aging infrastructure and a modest push toward renewable capacity. However, the legislature’s new bill, signed by Governor Kay Ivey, effectively shields Alabama Power from the PSC’s tighter scrutiny, allowing the company to keep its profit margins while delaying any meaningful expansion of solar or wind assets.

Mack Butler, a senior policy analyst at the Alabama Energy Policy Center, said he is not angry about the outcome. “That’s just how it goes in the Legislature sometimes,” he told Inside Climate News, leaning back behind his desk in Montgomery. Butler added that the utility’s lobbying budget—over $12 million in the last fiscal year—has been a decisive factor in shaping the policy debate. The public, meanwhile, has expressed frustration. A recent poll by the Alabama Public Interest Research Group found that 68 percent of residents are unhappy with the lack of progress on clean‑energy goals, and 55 percent say they would support a higher rate if it meant a faster transition to renewable power.

What happens next? The utility’s record profits have sparked renewed calls for a comprehensive review of the PSC’s decision‑making process. A bipartisan task force is scheduled to meet next month to examine the influence of corporate lobbying on rate approvals. Meanwhile, the upcoming 2026 elections could bring new faces to