Huntsville customers are getting hit with Alabama Power's new Rate RSD Storm Damage Recovery rider after the April tornado damage. The tariff says it's for "extraordinary storm restoration costs" but I'm seeing charges that look like routine tree trimming and preventive maintenance. One industrial account is paying $1,847/month on this rider alone. The cost allocation methodology seems questionable - they're spreading tornado repair costs across all rate classes equally instead of by benefit received.
Alabama Power's Storm Damage Recovery Rider - Rate RSD Questions
Albert, I dealt with Alabama Power's storm riders after Hurricane Ivan back in 2004. They always try to include non-storm work in these recovery mechanisms. The key is getting the detailed work orders - if you see routine vegetation management or scheduled equipment replacements mixed in with actual storm restoration, challenge it. The PSC usually requires strict documentation showing direct storm causation.
Same playbook Duke Energy used after Hurricane Matthew. They tried to recover $180 million in "storm costs" that included regular pole replacements, transformer upgrades, and line clearance work scheduled months before the hurricane. The NCUC made them separate actual storm damage from routine maintenance. Saved ratepayers about $31 million in inappropriate charges.
Derek's experience matches what we're seeing in North Carolina. The trick is demanding time records showing when work orders were created versus storm dates. If equipment was already scheduled for replacement or maintenance, it can't be storm-related even if the storm accelerated the timeline. Also watch for contractor markup abuse - utilities often pay premium rates during storms then try to recover the full cost.
Here in Texas we fought a similar battle with CenterPoint after Hurricane Ike. They wanted to recover $2.8 billion in storm costs including office overtime, executive travel, and "customer communication expenses" - basically their entire PR budget for six months. The PUC approved maybe 60% of their request after we challenged the kitchen sink approach. These utilities see storms as blank checks for infrastructure wish lists.
Good insights everyone. I've requested the detailed cost breakdown from Alabama Power and you're right about the routine maintenance mixing. Found work orders for tree trimming dated three weeks before the tornado that got lumped into storm restoration costs. Also seeing questionable contractor charges - $180/hour for basic line work that normally costs $75/hour. Building the challenge case now.
Albert, make sure you check the cost allocation methodology too. Indiana Michigan Power tried to allocate storm costs based on total kWh usage instead of benefit received. Industrial customers who rarely lose power during storms were subsidizing residential distribution repairs. We got that overturned and saved our clients about 35% on their storm rider charges.
Greg raises a good point about cost allocation. Xcel Energy in Colorado does a similar thing with their Electric Commodity Adjustment - they allocate transmission storm costs to all customers even though industrial customers have their own backup systems and backup power contracts. The allocation should reflect who actually benefits from the storm restoration work.
This is why I always recommend challenging these storm riders automatically. Here in Nevada, NV Energy tried to recover $45 million after some wind storms in 2015. About 30% of the costs were for equipment upgrades they had planned anyway - they just accelerated the timeline and called it storm restoration. The PUC only approved $31 million after customer challenges. Easy money if you know what to look for.
Tony's absolutely right. National Grid here in Rhode Island does the same thing after every nor'easter. They have a standard infrastructure improvement list and whenever there's a storm, suddenly half of it becomes "storm restoration." Last year we caught them trying to recover $8.2 million for substation upgrades that were in their 2015 capital plan. The key is getting the pre-storm planning documents.
Great discussion here. Steven's point about pre-storm planning documents is crucial - that's often the smoking gun that separates legitimate storm costs from opportunistic infrastructure recovery. I've seen utilities try to justify almost any expenditure if it happened within six months of a weather event. The documentation timeline is everything in these cases.