Earlier this month the Alabama Public Service Commission (PSC) allowed Alabama Power to go ahead with a rate increase. The power company sited the increase in various fuel costs trickling down to the consumer as the main reason for the increase.

Alabama Power said that the combined effect of the adjustments will mean about a $15 increase to the average residential customer’s monthly electric bill.

The PSC is allowing the increase in order for Alabama Power to recover a deficit in paying for the rising price of coal and natural gas used in its power plants across the state in the past year. According to the company, coal prices are up anywhere from 27 percent to 227 percent while natural gas prices are up 45 percent.

Part of that adjustment will mean approximately a $9.30 increase per month in the fuel charge for most customers, which took effect last week. Alabama Power does not earn a profit from fuel.

The next part is primarily to deal with increases in the cost of providing electric service to customers or an increase in the base charge, which will result in anywhere from $14.50 per month or an increase of $5.59 per month. This adjustment will happen in January.

“These base charges help ensure that electricity is available to customers, customer service and to handle maintenance to our system or repairs due to accidents or bad weather,” company spokesperson Gina Warren said. As an example, she cited that copper prices are up more than 300 percent.

Right now, the average customer pays about $112 per month, according to the company. With the combine increases, an average bill will be approximately $128 per month with the increase.

As a result of the adjustments, Alabama Power agreed to the commissioners not to seek additional rate adjustments for all of 2009.

Warren said that the company did want to make clear that adjustments will not be applied to the bills of low-income customers who have applied for exemptions with Alabama Power. Specifically, customers who are eligible for SSI or certain low-income Medicaid programs will not be affected.