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If you are a customer of Alabama Power Company, there’s some good news coming your way just ahead of the holiday season.

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

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

A reduction in overall retail rates is notable considering recent inflationary pressures affecting the U.S. energy industry. For example, in the past five years, Alabama Power has seen the cost of a transformer increase by 204%, while power poles are up 56% and electrical wires by 134%.

In July, the APSC announced a 2.04% rate reduction due to lower fuel costs. This month, the commission announced an additional 3.27% reduction for the same reason.

The APSC is also returning $96 million, or a 1.44% reduction, to Alabama Power retail customers in 2025 based on a legal judgment awarded to the company in 2024. These funds will be distributed as bill credits to customers from January to March 2025. The U.S. Court of Federal Claims awarded Alabama Power damages resulting from the federal government’s failure to meet its obligations for the handling of spent nuclear fuel.

A Rate Stabilization and Equalization adjustment of 4.87% was made to account for the rising cost of electricity due to inflation, as well as long-term investments Alabama Power is making in grid resilience and power generation.

Additionally, the commission approved Alabama Power’s request to keep Rate CNP-C flat in 2025, which further lessens the impact of rising costs on customer bills. Rate CNP-C represents compliance costs associated with federal government mandates and environmental regulations.

Electric companies across the nation are dealing with higher cost pressures. Since January 2021, electricity prices in the U.S. have risen 29.4% — 50% more than overall inflation, according to a Wall Street Journal analysis of Bureau of Labor Statistics data.