Alabama Power customers will see some relief on their electric bills in 2025.

According to the utility, a typical residential customer using 1,000 kilowatt hours will see a monthly reduction of $8.62 in their bill from January to March 2025. A residential customer’s bill is reduced by an average of 80 cents throughout the year.

The decline in January, February and March comes as the Alabama Public Service Commission (APSC) paid back $96 million from a 2024 court judgment. The ruling awarded damages to Alabama Power after the federal government failed to fulfill its obligation to settle spent nuclear fuel.

On Tuesday, Alabama Power representatives answered questions from APSC staff, the Alabama Attorney General’s Office and audience members during a public hearing on a 4.87% Rate Stabilization and Equalization (RSE) adjustment.

“There will be several adjustments made next year. The net impact of this is an annual decline of about 80 cents for a typical residential customer,” said Bronson Kilgore, financial planning manager for Alabama Power. “If you look at RSE on its own, the impact on a typical residential customer is about nine dollars a month, but when you take these other things into account, you get a net decline of 80 cents.”

The company said the reduction in overall retail prices was “notable given recent inflationary pressures impacting the U.S. energy industry.”

In five years, Alabama Power recorded the following costs:

• Transformers increase by 204%
• Electricity poles rise by 56%
• Electrical cables increase by 134%

Operation and maintenance costs were also discussed at the public hearing.

“We see an increase in operating and maintenance costs of approximately $74 million. The main reason, again, is significantly increasing inflationary pressures,” said Daniela Willcox, financial planning and budget manager at Alabama Power.

Willcox said costs for steam power, vegetation management and vehicle fleet maintenance were specific areas that were seeing significant increases.

She explained the company’s steps to mitigate the impact of inflation.

“We cannot emphasize enough the unprecedented impact of inflation on our business,” Willcox said. “One of the measures the company has taken is to offset this increase in costs on behalf of our customers. While we can maintain some flexibility in reducing costs, we recognize that there are limits to this flexibility. Some examples of areas.” This has great benefits in offsetting these costs as we adjust the schedule and scope of our maintenance programs. Another area is staff exodus and the resignation of employees. We are working on not filling these positions, but at least some point, these temporary measures, we need to provide additional resources so that we can maintain reliability.”

Enduring tactics include investing in automation and using drones to investigate problems with power lines instead of sending multiple line monitors.

In a press release, the company also noted:

Actions taken by the Alabama Public Service Commission (APSC) and Alabama Power during 2024 will result in a 1.88% reduction in overall retail prices in 2025.

As Alabamians feel the impact of inflation on household spending, Alabama Power has worked hard to mitigate the impact of rising costs on customers’ bills by reducing the company’s costs by more than $100 million since 2017 has.

In July, the APSC announced a 2.04% reduction in tariff due to lower fuel costs. This month the Commission announced a further reduction of 3.27% for the same reason.

The (APSC) approved Alabama Power’s request to keep the CNP-C rate unchanged in 2025, further mitigating the impact of rising costs on customer bills. The CNP-C rate represents the compliance costs associated with federal and environmental regulations.