Summary
This 8-K filing by Southern Company and its subsidiary Alabama Power Company primarily concerns a regulatory filing made by Alabama Power with the Alabama Public Service Commission (APSC) on August 2, 2004. The filing seeks to establish a specific rate mechanism for recovering retail costs related to environmental laws and regulations. If approved, this mechanism is expected to go into effect in January 2005, with annual adjustments to a recovery factor. For investors, the key takeaway is the potential for retail rate increases to cover these environmental compliance costs. The company anticipates a retail rate increase of approximately 1% ($33 million) in 2005 and an additional 1% ($30 million) in 2006, attributed to the recovery of operation and maintenance expenses, depreciation, and a return on invested capital. The ultimate outcome of the APSC's decision is currently undetermined.
Key Highlights
- 1Alabama Power Company filed with the Alabama Public Service Commission (APSC) on August 2, 2004.
- 2The filing proposes a specific rate mechanism to recover retail costs associated with environmental laws and regulations.
- 3If approved, the environmental cost recovery mechanism is slated to begin in January 2005.
- 4The mechanism will involve an annually calculated factor to recover these costs.
- 5Anticipated retail rate increases are approximately 1% ($33 million) in 2005 and an additional 1% ($30 million) in 2006.
- 6Costs to be recovered include operation and maintenance expense, depreciation, and a return on invested capital.