Alabama Public Service Commission approves Alabama Power gas plant acquisition amid soaring gas prices

BIRMINGHAM, Ala. — Today the Alabama Public Service Commission approved Alabama Power’s request to acquire the Calhoun Gas Plant and also increased the utility’s energy cost recovery factor, resulting in an approximately $7 increase to Alabamians’ monthly bills.

Just over a year after receiving approval to add almost 1,900 megawatts of additional gas resources, Alabama Power requested in October 2021 to acquire Calhoun Gas Plant, yet another plant that generates electricity by using “natural gas,” a carbon-emitting fossil fuel made of methane.

The Southern Environmental Law Center intervened in the proceeding on behalf of Energy Alabama and the Greater Birmingham Alliance to Stop Pollution and advocated for clean, cost-effective alternatives like solar and battery storage facilities and more energy efficiency programs — alternatives that would not only be cheaper for Alabamian ratepayers, but which would also shield them from price hikes like the one the commission approved today. 

Alabama Power claims that it needs the Calhoun plant because it plans to retire a large coal unit at the Barry Plant near Mobile; however, the utility’s flawed planning process failed to adequately consider clean energy options in lieu of further dependency on fossil fuels with volatile — and increasingly high — prices.

Increased investment in fossil fuels is concerning not only because of their impact on climate change, but because prices for renewable forms of energy like wind and solar — already lower than gas — are expected to fall further thanks to innovations in technology, while the price of gas is expected to stay high for the foreseeable future.

“Alabama Power is doubling down on gas at a time when utilities should be pursuing lower-cost and less-risky renewable energy and energy efficiency options,” says Christina Andreen Tidwell, senior attorney in SELC’s Alabama office. “Especially considering the energy burden Alabamians already face, the Public Service Commission’s decision should have taken into consideration the volatility, ultimate environmental impacts, and hefty price tag of gas, rather than simply passing them on to Alabamians.”

“Despite Southern Company’s purported commitment to a net-zero carbon goal, Alabama Power continues to invest ratepayer money into energy sources that hurt the environment and communities in the state,” says Michael Hansen, executive director of GASP. “Let’s be crystal clear: gas is neither clean nor renewable. The Alabama Public Service Commission must hold the utility accountable to the families most affected by the company’s decision to push forward with reliance on gas.”

“The Commission should have required Alabama Power to conduct a robust and transparent planning process to ensure that the utility’s energy resource decisions are in the best interest of customers instead of shareholders,” says Daniel Tait, executive director of Energy Alabama. “Instead, the Commission rubberstamped Alabama Power’s request for more expensive and unreliable fossil fuels.”

According to Southern Company’s own data, Alabama Power’s average “natural gas” fuel price increase in 2021 was larger than any other fuel source. Now that the commission has voted to increase Alabama Power’s energy cost recovery factor, Alabamians will pay even more for extra generation capacity that gets little use and is at the whims of a highly volatile and unpredictable market.