Bill to turn an Alabama regs commission into an appointed board on hold

By EPN Staff

A bill that would fundamentally change how members of the Alabama Public Service Commission (PSC) are chosen has been tabled for now.

If passed, Alabama’s House Bill 392 would transform the elected PSC into a governor-appointed board. It has been pulled from the voting calendar while the sponsor seeks more support in the state senate, the Alabama Reflector reported. The PSC oversees investor-owned utilities and approves rates for electricity and natural gas.  

The bill would enable the governor to appoint new members to the three-member PSC board in 2028 and 2030, drawn from a list provided by the speaker of the Alabama House of Representatives and the Alabama Senate president pro tem. 

Consumer groups oppose the bill because it eliminates voter influence over how utility companies are regulated. Proponents contend that appointed commissioners are more likely to have technical expertise in energy production and policy. If passed, the bill would require utility companies to conduct informational meetings with the public. 

Why it matters

Studies found that elected commissions set lower rates and are more responsive to the public’s concerns than appointed commissions. Authors of one study concluded, “When commissioners for public utility regulatory bodies stand for reelection, presumably the most important factor to voters is their utility bill. Elected utilities commissioners seem to understand this and use the opportunity afforded by electricity rate increase proposals to adjust rates in a direction favored by the median voter.” 

By contrast, governors or legislatures have more influence over appointed commissions and are less sensitive to consumer concerns. Colorado’s PUC, which has a governor-appointed board, recently mandated that gas utilities cut emissions far beyond reductions set in law, which will lead to higher utility rates and could compromise grid reliability. They made this decision despite the fact that consumers oppose forced electrification and want energy choice, according to a recent Colorado poll. 

Some studies have found that utilities seek to influence commissioners through election contributions to commissioners' campaigns or to governor and legislator campaigns in states that appoint commissioners. Alabama Power, however, is prohibited under existing law from donating to PSC candidate campaigns. Since the law does not prevent utility companies from donating to lawmakers’ campaigns, opponents of HB-392 are concerned that Alabama Power will attempt to exert more influence if HB-392 passes. 

The bigger picture 

Alabama’s utility rates are close to the national average but higher than those of other southern states, according to the US Energy Information Administration. Alabama Power, which serves most of the state, has vowed to keep “rates steady through 2027 under the Alabama Public Service Commission (PSC) framework.”

Nine of the 10 states that elect PUC commissioners, Alabama, Arizona, Georgia, Louisiana, Montana, Nebraska, North Dakota, Oklahoma, and South Dakota, will elect commissioners this November, according to government relations firm MultiState. 

Most states have three to five elected or appointed commissioners who serve four-to-six-year terms. Of the states that appoint commissioners, two assign this responsibility to the legislature, 36 grant it to the governor, and two split the appointments between the executive and legislative powers, MultiState reports.