§ 37-1-80 — Rates to Be Just and Reasonable; Right of Utility to Earn Fair Net Return; Alternative Methods of Regulation

Alabama § 37-1-80

• Jurisdiction: Alabama
• Title 37: Public Utilities and Public Transportation
• Ch. 1: Public Service Commission
• Art. 2: Powers and Duties Generally
• Div. 2: Rates and Other Regulations

Text

(a) The rates and charges for the services rendered and required shall be reasonable and just to both the utility and the public. Every utility shall be entitled to such just and reasonable rates as will enable it at all times to fully perform its duties to the public and will, under honest, efficient and economical management, earn a fair net return on the reasonable value of its property devoted to the public service. For the purpose of fixing rates, such reasonable value of a public utility’s property shall be deemed to be the original cost thereof, less the accrued depreciation, as of the most recent date available. In any determination of the commission as to what constitutes such a fair return, the commission shall give due consideration among other things to the requirements of the business with respect to the utility under consideration, and the necessity, under honest, efficient and economical management of such utility, of enlarging plants, facilities and equipment of the utility under consideration, in order to provide that portion of the public served thereby with adequate service.
(b) Notwithstanding subsection (a) or any other provision to the contrary, the commission retains its authority to consider and adopt alternative methods of regulation of a utility as defined in Section 37-1-30 to establish rates and regulations for services furnished by the utility that are fair, just, and reasonable to the public and that provide fair, just, and reasonable compensation to the utility for the services.
(1) For the purposes of this subsection, the phrase “alternative methods of regulation” means the regulation of utility rates and service regulations by methods other than a determination of net return on a predetermined rate base.
(2) After June 20, 1995, any proceeding to adopt an alternative method of regulation as defined in subdivision (1) shall be initiated by application of the utility seeking such alternative regulation, by the commission on its own motion, or by the Attorney General as provided in Section 37-1-16.

Legislative History

(Acts 1920, No. 37, p. 38; Code 1923, §9770; Code 1940, T. 48, §52; Acts 1949, No. 89, p. 113; Acts 1971, 1st Ex. Sess., No. 97, p. 171, §1; Acts 1978, No. 850, p. 1273, §1; Acts 1995, No. 95-210, p. 340, §1.)