Thousands of small businesses that rely on Alabama Power Co. will get a break on their electric bills in the new year. Savings for other customers may also be ahead.

The Alabama Public Service Commission voted unanimously Tuesday for a rate adjustment that will save more than 22,000 small businesses more than $25 per month.

On Dec. 1, the PSC will review the rates that Alabama Power's residential customers pay. Commission members said they anticipate a rate reduction that will begin around Jan. 1.

"I think December will be a good month for the consumer," Commissioner Jan Cook said.

Zeke Smith, Alabama Power's vice president for financial and regulatory planning, said he shares Cook's optimism.

He said heavy rainfall has increased production from the company's hydroelectric plants, which is the cheapest kind of electricity. Also, coal prices have stabilized after rising sharply, and natural gas prices are lower than a year ago.

The PSC's rate structure guarantees Alabama Power, a subsidiary of Southern Co., will recover what it spends on fuel costs for its power plants. For many months, the utility had been going in the hole.

Last November, the deficit reached $328.6 million. But now Alabama Power is ahead $54.7 million, which commissioners said is another indication a rate reduction is likely.

Smith said it's too early to predict the size of any changes Alabama Power might recommend. Continued...