News Increased Regulations Drive Up Utility Costs

Increased Regulations Drive Up Utility Costs

Increased Regulations Drive Up Utility Costs
February 3, 2015 |

Many Alabama farmers greeted the new year with slightly higher electricity bills for their homes and farms. For the first time in more than three years, Alabama Power increased electric rates 4.93 percent on Jan. 1.

A typical homeowner can expect to pay around $6.78 more per month, but the costs will be higher for Alabama farmers. Fourth-generation poultry farmer Chris Upchurch of Clay County said he expects to pay about $1,200 more in 2015.

“Electricity is a major expense,” Upchurch said. “I don’t think this increase is going to break anybody. But it does mean less money in my pocket, so we’ll have to find some way to lower expenses and offset that increase.”

Upchurch built three mega-poultry houses in 2010 and incorporated the latest energy-efficient technology, including solid side walls, increased insulation and cold cathode fluorescent light bulbs.

“The biggest electricity draws in a poultry house are the fans, lights and feeders,” he said. “We keep our fans as clean as possible so they run more efficiently. The next step will be putting in LED bulbs. That technology has improved in the last five years.”

Catfish farmers and greenhouse operators will also be affected by increased rates, as their operations draw large amounts of electricity.

Alabama Power Media Relations Coordinator Michael Sznajderman said the adjusted rate was necessary to recoup billions of dollars in expenses related to federal environmental regulatory mandates. Those include proposed revisions to the Clean Air Act requiring existing power plants to reduce carbon emissions.

“We’ve already started work to retire a couple of coal units entirely, convert other units from coal to natural gas and add more environmental controls,” Sznajderman said.

He said customers who have questions or concerns can speak with their Alabama Power representatives or call the main customer service line at (800) 245-2244.

Alabama Public Service Commission Chairman Twinkle Cavanaugh said Alabama Power delayed making adjustments during recent tough economic times.

“Alabama Power held off on recouping costs for almost four years and finally needed to put something on the books,” Cavanaugh said. “Alabama Power doesn’t get to ask the public for money and then make changes. It has to make the changes first and then ask for reimbursement.”

According to national reports, Alabama Power rates remain 10 percent below the national average and 2 percent below the Southeastern average.

“In my opinion, this is all about President Obama trying to disadvantage us in the South,” Cavanaugh said. “I’m going to fight him at every turn, because keeping our electricity prices below the national average gives us a competitive advantage when it comes to bringing jobs to the state and keeping jobs in Alabama.”

Cavanaugh also encouraged farm customers to talk with Alabama Power representatives to ensure their farm is categorized correctly for different agricultural rates.

Alabama Power is not alone in dealing with increased business expenses due to environmental mandates. The National Rural Electric Cooperative Association estimates proposed regulations for existing power plants will raise electric rates across the country by more than 10 percent on average in 2020 and more than 17 percent by 2025.

“Each electric cooperative will have to decide individually what to do with rates, but it won’t all happen right away,” said Alabama Rural Electric Association Vice President of Communications Lenore Vickrey.

More than 1.1 million comments opposing the Clean Air Act revisions were submitted to the Environmental Protection Agency (EPA) by members of America’s electric cooperatives. The public comment period ended in December 2014, but Vickrey said people can still urge state legislators and Congressmen to keep pressure on the EPA. The final Clean Air Act rule is expected in June 2015.

“The EPA itself has stated that 21 percent of coal plants owned by electric cooperatives will be closed by 2025, thus killing jobs and hurting our communities,” Vickrey said.

More information on the Clean Air Act is available at

Back in Clay County, Upchurch said he will continue to look for ways to improve energy-efficiency in his poultry houses and increase farm income to stay in business.

“I have cows to supplement income, and we’re selling and transporting chicken litter now,” Upchurch said. “I just love farming, and it’s what I’ve always wanted to do.”

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