Alabama Power, the state’s dominant electric utility, entered the 2026 legislative session facing the most serious regulatory threat in its modern history. It emerged largely unscathed — and on pace for what could be a record annual profit. The story of how that happened illuminates something durable about the relationship between concentrated utility power and state politics, not just in Alabama but across much of the American South.
A Bill That Actually Had Teeth
Republican state representative Mack Butler arrived at the 2026 session with an unusual piece of legislation. Butler, who became a master electrician at 21 and has run an electrical contracting firm for years, is not the typical utility critic. He comes from the industry. He understands load calculations and billing structures in ways most legislators don’t. That background gave his proposal a credibility that consumer-advocacy-driven bills often lack.
What Butler drafted was, by any measure, aggressive. The bill would have required Alabama Power to submit to its first formal rate case hearings since 1982 — a process that would have forced the company to open its books and justify its rates before regulators in a structured, adversarial proceeding. It would have capped the utility’s profits, restricted how much Alabama Power could bill customers for expenditures like advertising and lobbying, and placed limits on the company’s political donations.
That last provision matters more than it might appear. Alabama Power employs at least four lobbying firms and six registered lobbyists, according to state records, and its influence in Montgomery is widely regarded as among the most formidable of any private entity in the state.
Despite all of that, Butler’s bill passed the Alabama House in March by a vote of 104 to 0. That kind of unanimous margin doesn’t happen by accident. It reflected genuine, bipartisan frustration with utility rates and a sense among House members that the status quo had become indefensible.
Where the Bill Died
The Senate is a different institution. Butler said he had handshake agreements with key senators to move a modified version of the bill through that chamber. Those agreements did not hold.
Steve Flowers, a longtime Republican political commentator who spent years in the Alabama Legislature himself, offered a blunt assessment: the people who make the ultimate decisions in Montgomery are not always the people whose names appear on the legislation. Alabama Power’s lobbying operation had time, resources, and relationships that a single reform bill — however popular — could not easily overcome.
The utility is a subsidiary of Atlanta-based Southern Company, one of the largest electric utility holding companies in the United States. Through the first two quarters of 2026, Alabama Power reported approximately $860 million in profit, a 14 percent increase over the same period in 2025. If that pace holds, the company would finish the year at roughly $1.72 billion in profit — a record by a significant margin.
A company generating that kind of return has strong incentives to protect the regulatory environment that makes it possible. Alabama’s current oversight structure, which has not required a formal rate case in more than four decades, is a meaningful part of that environment.
Why No Formal Rate Case Since 1982
The absence of a rate case hearing since 1982 is worth pausing on. In most states, investor-owned utilities are required to periodically justify their rates in proceedings before a public utilities commission, where consumer advocates, industrial customers, and regulators can challenge the utility’s cost structure and profit assumptions. Alabama has not done this for Alabama Power in over 40 years.
That doesn’t mean rates have been entirely unregulated — the Alabama Public Service Commission does exercise oversight — but the absence of a full adversarial rate case means there has been no systematic, public examination of whether the company’s profits are proportionate to its actual costs and investments. Butler’s bill would have ended that arrangement. The Senate’s inaction preserved it.
The Profit Question
Alabama Power’s projected 2026 earnings are striking in context. The company serves roughly two-thirds of Alabama, a state with a median household income well below the national average. Utility bills represent a larger share of household budgets for lower-income customers, and Alabama’s rates have drawn scrutiny from consumer groups for years.
Whether Alabama Power’s profits are excessive depends on what framework you use. The company would argue that its returns reflect prudent investment in infrastructure, grid reliability, and the capital requirements of operating a large utility system. Critics — including Butler — argue that without a formal rate case, there is no independent mechanism to verify that claim.
The 14 percent profit growth from 2025 to 2026 is also notable because it occurred in an environment of rising electricity demand, partly driven by industrial growth and data center expansion across the Southeast. Higher demand can lift utility revenues even without rate increases, but it also raises questions about whether customers are sharing adequately in the benefits of that growth.
What Butler’s Bill Would Have Changed in Practice
It is worth being concrete about what the legislation would and would not have done, because utility reform proposals are often discussed in vague terms.
- Rate case hearings: Would have required Alabama Power to justify its existing rates in a formal proceeding — something that has not happened since Ronald Reagan’s first term.
- Profit cap: Would have placed a ceiling on the utility’s allowed rate of return, a standard tool in utility regulation elsewhere.
- Customer charge restrictions: Would have prohibited Alabama Power from passing through certain costs — including advertising and lobbying expenses — directly to ratepayers. This is a provision that exists in various forms in other states but has no equivalent in Alabama’s current framework.
- Political donation limits: Would have restricted the utility’s ability to use its financial weight in state elections and political campaigns.
None of these provisions are radical by national standards. Several are routine features of utility regulation in other states. Their absence in Alabama reflects the accumulated political influence of a single company over several decades.
Butler’s Reaction — and What Comes Next
Butler, speaking from his office in Rainbow City, said he was not angry about the outcome. “That’s just how it goes in the Legislature sometimes,” he told reporters. That equanimity may be genuine, or it may be the pragmatism of someone who intends to try again.
His bill’s 104-0 House passage is a political fact that does not disappear. It signals that the reform constituency is broader than Alabama Power’s opponents might have expected, and that the company can no longer rely on quiet legislative indifference. Whether that translates into actual reform in a future session depends on factors that are difficult to predict — including whether the Senate’s resistance holds, whether public pressure builds, and whether Alabama Power’s profit trajectory continues to generate headlines.
What is clear is that the current regulatory arrangement has served the company extraordinarily well, and that changing it will require sustained political effort of a kind that a single legislative session, however promising, could not deliver.
Sources
- Inside Climate News, “How Alabama Power Escaped a Push for Tighter Regulation With Record Profits Intact,” published September 13, 2026. https://insideclimatenews.org/news/13092026/how-alabama-power-escaped-tighter-regulation/
Meta: Alabama Power defeated a sweeping 2026 utility reform bill in the Alabama Senate, preserving a regulatory status quo unchanged since 1982 — while projecting record profits.
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