Alabama Power net profit rose $113M in 2025, what this means for customers

BIRMINGHAM, Ala. (WBRC) — Alabama Power’s net profit increased by $113 million in 2025, an 8% jump from the previous year, according to new federal filings from its parent company, Southern Company. An earnings report shows the post-tax revenue as $1,516 million, up from $1,403 million year-over-year.

The report indicates the increase was driven largely by higher revenues collected from customers through electricity rates and growing demand for power.

“The increase was primarily due to higher retail electric revenues resulting from changes in rates and pricing,” the filing states.

Those revenues come mainly from the base electric rate, the portion of customer bills that pays for everyday service, infrastructure and utility profit.

How your electric rates are set

The Alabama Public Service Commission, or ASPC, sets your utility rates through formula rates rather than traditional rate cases, where utilities must request a rate increase and show why it’s needed.

Rate RSE, which covers utility service and profit, automatically adjusts customer rates to keep Alabama Power’s earnings within an approved set range of 5.75% to 6.15%. If Alabama Power’s projected profit is higher than the range, rates can fall If it’s lower than expected, rates go up.

“Changes in rates and pricing resulted in an increase in revenues primarily due to an increase in Rate RSE,” the filing cites.

That means higher base-rate revenues from customers contributed to the company’s profit growth in 2025.

Customer-funded infrastructure spending also boosted profits

The filing also shows Alabama Power earned more profit from new infrastructure investments added to its electric system.

When utilities build or upgrade power plants, transmission lines, and grid equipment, those costs are added to the company’s rate base, paid through electric bills. Utilities are then allowed to earn a return on that investment.

As Alabama Power’s infrastructure base grows, the amount customers are paying for and the profit the company earns on it grows as well.

Growth and demand also increased revenue

The filing also points to rising electricity demand.

Alabama Power added about 39,000 new customers in 2025 and saw increased energy use tied to economic development.

Revenue outpaced expenses

Alabama Power’s operating and maintenance expenses and depreciation also increased in 2025, the filing shows.

But the growth in revenue outpaced those costs, resulting in higher overall profit.

Alabama bills already among nation’s highest

A WBRC investigation revealed Alabamians pay some of the highest power bills in the country.

The day after that story aired, Alabama Power petitioned the ASPC to freeze base rates for two years. The Alabama Public Service Commission promptly approved the request.

Broader policy debate

This report comes as a bill is being considered by Alabama lawmakers that would strip voters of the right to elect the APSC, who sets utility rates in Alabama. The bill advanced out of a House committee but stalled suddenly before a full House vote. It’s unclear whether the bbill will be back on the calendar before the end of the session.

Sunday, WBRC published audio of a call with an Alabama Power lobbyist working to gain support of the bill from clean energy nonprofit, Energy Alabama.

You can read our coverage here.

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