MONTGOMERY, ALA. (WDNews) — Alabama lawmakers are considering a series of proposals aimed at changing how electricity rates are regulated across the state, with supporters saying the changes could help address rising utility costs for consumers.
One of the key proposals is House Bill 475, sponsored by Rep. Mack Butler. The bill would require the Alabama Public Service Commission to hold annual public meetings focused on utility regulation. It would also prohibit utilities such as Alabama Power from passing costs related to lobbying, advertising and certain grants on to customers.
Supporters of the legislation say the goal is to increase transparency in how utility rates are set and ensure ratepayers are not covering expenses unrelated to electricity service.
Another major part of the discussion centers on rate case reforms. Lawmakers are looking at ending more than four decades of automatic rate adjustment practices. Under the proposal, utility companies would be required to formally request rate increases instead of relying on automatic or interim consent orders.
A separate measure, House Bill 403, focuses on electricity demand from large data centers. The proposal would require data centers to pay for their own increases in power usage rather than allowing those costs to be spread across other residential and business customers.
Lawmakers have also discussed broader regulatory changes, including proposals to restructure how the Public Service Commission operates. One idea would end elections for PSC commissioners and align the agency’s structure with other regulatory bodies. That proposal has been delayed for further consideration.
The debate comes as Alabama faces some of the highest electric utility rates in the region. Critics say the current system allows rate increases to occur without enough public oversight. State records show the Public Service Commission has not held a formal public rate hearing since 2008.
At the same time, Alabama lawmakers have recently passed legislation aimed at protecting consumer energy choices. A 2024 law prevents policies that would restrict the use of certain appliances based on the type of energy source they use.
The proposals are still being debated during the 2026 legislative session, and lawmakers are expected to continue reviewing possible reforms to Alabama’s utility regulation system.
