MONTGOMERY, Ala. - Residential customers of Alabama Power Co. should start saving about $2 per month, beginning in April, due to a third rate reduction in less than a year.
The Alabama Public Service Commission announced the rate reduction Tuesday.
Part of the decrease is due to an immediate drop in the amount that customers pay each month for Alabama Power's reserve fund for repairs after natural disasters. That fund reached its target level of $75 million, and the monthly charge for residential customers dropped from 75 cents to 15 cents monthly.
The charge for nonresidential customers fell from $1.86 to 37 cents.
The majority of the decrease is due to the utility realizing savings on agreements to purchase electricity from other power plants. That part of the decrease starts April 1.
Alabama Power spokesman Pat Wylie said the typical monthly household bill for 1,000 kilowatt hours will drop from $120.77 to $118.79 in April. That's a decrease of $1.98.
Previous rate decreases occurred in June 2009 and in January. All together, they reduced rates nearly 12 percent, the PSC said.