Alabama Power did not change rates on October 1, 2026. The company says its rates are frozen through 2027. What did change on October 1 is state law.
This article covers Alabama Power, the state’s largest electric utility. It does not cover TVA-served north Alabama, cooperatives or municipal utilities.
Quick Summary
| Item | Date | What it means |
|---|---|---|
| Rate freeze | Through 2027 | Per-kWh rates held |
| Senate Bill 270 | Effective Oct. 1, 2026 | New oversight rules, including for data centers |
| Gas plant charge | Expected 2028 | About $3.32 a month for an average customer |
What the Freeze Covers
Alabama Power’s customer information page says: “Customer rates are frozen through 2027,” under a framework approved by the Alabama Public Service Commission (PSC). It also lists what can still change:
- Usage. Heating and cooling are 50% to 70% of energy use in a typical home.
- Taxes included in the bill.
- Seasonal billing tiers.
- Other PSC-approved tariff items.
The Birmingham Free Press reported that Governor Kay Ivey extended the freeze through 2028. Alabama Power’s page says 2027, so we use that date.
How Alabama Bills Compare
Using 2024 federal data, the Birmingham Free Press reported:
- Average residential bill: $173.50 a month, third-highest in the country.
- Average rate: 15.18¢ per kWh, below the 16.48¢ national average.
- Average use: 1,143 kWh a month, against 863 kWh nationally.
Bills are high mainly because use is high.
What Changed on October 1: State Law
Senate Bill 270 took effect on October 1, 2026. Among its provisions, data centers needing at least 150 megawatts at one site must pay the incremental cost of their service, and their contracts must recover full costs. The PSC opened proceedings in summer 2026 to review data center contracts.
What Comes After the Freeze
A charge for a $622 million natural gas plant Alabama Power acquired in 2025 is expected to start in 2028, adding about $3.32 a month to an average bill.
What This Means for Homeowners With Solar
We did not verify Alabama’s current net metering or export credit rules for this article, so we give no export rates here. Ask your utility for its current solar tariff, and check how exported energy is credited before sizing a system. Fixed monthly charges are not reduced by solar.
Our solar payback guide shows how the retail rate and the export credit change the math.
What to Check on Your Bill
- Your kWh this month against the same month last year.
- Whether a seasonal tier changed.
- Tax lines.
For help sorting the lines on your bill, see our guide to reading your electric bill.
Limitations
We did not open PSC orders or Alabama Power’s tariff. The 2028 figures and the governor’s extension come from one news outlet.
Sources
- Alabama Power, “Are Rates Going Up”
- Birmingham Free Press, “Alabama Power Freezes Rates as Data Centers Face New Cost Rules,” Aug. 22, 2026
- WBRC, “Alabama’s new energy law shakes up utility oversight, offers little cost savings,” April 4, 2026
Frequently asked questions
Did Alabama Power rates change on October 1, 2026?
No rate change was found. Alabama Power says its customer rates are frozen through 2027. A new state utility law did take effect on October 1, 2026.
If rates are frozen, why did my bill go up?
Alabama Power notes that bills still change with usage, taxes and seasonal billing tiers. Alabama homes use about 30% more electricity than the U.S. average, according to the company.
What happens after the freeze?
A charge related to a $622 million natural gas plant acquired in 2025 is expected to begin in 2028, adding about $3.32 a month to an average bill, according to the Birmingham Free Press.
