Summary
This 8-K filing from Southern Company (SO) details a significant regulatory decision by the Alabama Public Service Commission (APSC) concerning Alabama Power Company's rate structure. Effective October 1, 2011, the APSC has ordered the elimination of a specific tax-related adjustment. This change is expected to provide Alabama Power with approximately $30 million in additional revenues for the remainder of 2011 and an annualized increase of about $150 million starting in 2012.
Key Highlights
- 1Alabama Public Service Commission (APSC) ordered the elimination of a tax-related adjustment in Alabama Power's rate structure, effective October 1, 2011.
- 2The elimination of this adjustment is anticipated to generate approximately $30 million in additional revenues for Alabama Power in the remaining months of 2011.
- 3An annualized revenue increase of approximately $150 million is expected for Alabama Power beginning in 2012.
- 4Additional accruals will be made to the Natural Disaster Reserve (NDR) in Q4 2011, equal to the additional 2011 revenues, to replenish funds depleted by April 2011 storm-related expenses.
- 5Alabama Power expects these additional revenues will avert the need for a rate adjustment under the Rate Stabilization and Equalization (Rate RSE) mechanism.
- 6As a result, Alabama Power has agreed to a moratorium on any Rate RSE increases in 2012.