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Alagasco to lower rates

For immediate release: December 8, 2010
Information contact: Susan Delenne 205 326-1612

Starting this month, the average residential customer of Alagasco will save about $240 for a year's worth of natural gas compared to rates in effect two years ago under a cost adjustment that has been filed with the Alabama Public Service Commission. 

The impact on individual customers will vary based on their usage. The December adjustment is Alagasco’s ninth rate reduction since October 2008.

The reduction is tied to a rate-setting formula the APSC has had in place for more than 25 years.  That formula, called Rate Stabilization and Equalization or RSE, promotes rate stability while also encouraging companies providing utility services to find ways to reduce costs and then pass those savings to customers. In Alagasco’s case, the formula takes into account operations and maintenance costs, depreciation, interest, taxes, and the company’s return on equity.  

Earlier this year, a study commissioned by Alagasco confirmed that as a result of efficiency improvements and advancements in technology, the company would be able to significantly reduce its future costs. The lower forecasted expense means Alagasco can lower its rates and pass those savings directly to customers. 

During July, the Company refunded approximately $26 million of operational savings to customers through a bill credit.  A second cost reduction, effective this month, will be implemented in the form of a seasonal rate reduction during the months of December through March – typically when customers use more gas and see higher gas bills.  

Alagasco, the largest natural gas utility in Alabama, serves 440,000 customers throughout central Alabama and offers rebates for energy efficient appliances.

Alagasco Contacts