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Q: Can I choose my electricity or natural gas provider in Alabama?

No. Unlike states like Texas or Pennsylvania , Alabama has a regulated utility market. This means your provider is determined by where you live. You will either be serviced by an investor-owned utility (like Alabama Power or Spire), an electric cooperative, or a municipal provider managed by your city.

Q: What is the average cost of utilities in Alabama?

On average, Alabama residents pay about $305 per month for combined essential utilities. This breaks down to roughly $169 for electricity, $112 for natural gas, and $24 for water. Keep in mind that electricity bills can spike significantly during the hot, humid summer months due to air conditioning.

Electricity Natural Gas Internet

Alabama Electricity Information

Alabama generates electricity from a balanced mix of natural gas, nuclear, coal, and hydropower. While coal was once the dominant source, natural gas has taken the lead, and nuclear power provides a steady, carbon-free supply. Hydropower plays a unique role, thanks to Alabama’s many rivers, and solar energy is slowly growing.

With hot summers and a strong industrial sector, Alabama has high electricity consumption, but its prices remain below the national average. The shift from coal to natural gas and nuclear has helped lower emissions, though the state still produces significant greenhouse gases. Investments in cleaner energy and efficiency are shaping Alabama’s energy future.

Decoding Your Bill: What are “Riders”?

You may notice line items on your bill labeled “Fuel Cost Recovery,” “Energy Cost Recovery,” or “Rate Stabilization.”

Pass-Through Costs: In Alabama, utilities are allowed to pass the fluctuating costs of fuel (coal and natural gas) directly to consumers. When the global price of natural gas rises, your bill will rise, even if your usage stays the same. The utility does not make a profit on this specific charge; it is a direct reimbursement for the fuel they bought to generate your electricity.
Taxes: Alabama utility bills often include a mix of state utility taxes (typically 4%) and local municipal taxes, which can vary significantly by city.

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Electricity Production

Primary Source

Natural Gas

Total Generation: 139,435,010 MWh
Ranks 6th Highest in the U.S.
Average Price: 16¢ /kWh
Ranks 27th Cheapest in the U.S.
Average Electric Bill: $169.35
Ranks 48th Cheapest in the U.S.

Electricity Production By Source

Emissions From Electricity Generation

Carbon Dioxide Emissions Rank

8th Highest

46,082 TMT

Sulfer Dioxide Emissions Rank

13th Highest

28,022 tn

Nitrogen Oxide Emissions Rank

17th Highest

25,726 tn

Renewable Electricity Generation

Renewable Production Rank

26th Highest

9,630,443 MWh
6.91% of Total Production

Source U.S. Energy Information Administration (EIA) Based on data from 2023

Energy Usage in Alabama

Energy Usage Per Capita Rank

40th Lowest

Average Per Person: 375 million BTU

Alabama’s electricity consumption is strongly influenced by its Southeastern climate, which brings long, hot, and humid summers alongside relatively mild winters. Air conditioning is the biggest driver of demand, with usage peaking during summer months when cooling is essential for both homes and businesses. While winter heating does contribute to overall consumption, it is far less intensive compared to colder regions. The state’s industrial sector, including manufacturing and chemical production, also adds to high electricity use. Together, these climate and economic factors make Alabama a consistently high electricity consumer throughout the year.

Municipal Utilities in Alabama

While most cities, towns, and villages throughout the state of Alabama offer municipal essential services like providing clean water, sewage treatment and dealing with waste and storm water, some also offer other services like electricity, natural gas, sanitation or recycling. In Alabama, 37 cities offer municipal electricity utility services to their residents.

Largest Electric Companies in Alabama

The rest of Alabama receives electric utility service from one of many primary providers. Here’s a list of some of the larger providers that might be available to your home:

Alabama Natural Gas Information

Natural gas is an important part of Alabama’s energy mix, supporting both electricity generation and direct use in homes and businesses. Much of the state’s power comes from natural gas plants, which have expanded as coal has declined. On the residential side, natural gas is widely used for heating, cooking, and water heating. Alabama’s Southeast climate, hot and humid in the summer, with relatively mild winters, shapes demand patterns: gas use for electricity peaks in the summer when air conditioning drives power needs, while winter heating demand is significant but less intense than in colder states.

Because of this climate-driven balance, natural gas in Alabama plays a year-round role. It ensures reliable electricity during summer peaks, while also meeting household heating needs in winter. With its strong pipeline network and growing reliance on gas-fired generation, the state continues to see natural gas as a cornerstone of both affordability and reliability in its energy system.

Average Natural Gas Price

$2.39 /CCF

Ranks 35th Cheapest in the U.S.

Average Natural Gas Bill

$112 /month

Ranks 34th Cheapest in the U.S.

Natural Gas Usage Per Capita

6th Lowest

Average Per Person: 165.14 MCFs Annually

Largest Natural Gas Companies in Alabama

Many of the residents of Alabama receive their natural gas utility service from one of the larger companies that service the state.

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Alabama Internet Connectivity

Broadband Availability

80.91%

Ranks 13th in the U.S.

Percent of Ppopulation with access to 100 Mbps download and 20 Mbps upload

1 Gig Availability

37.64%

Ranks 23rd in the U.S.

Percent of population with access to download speeds of 1 Gbps

Fiber Availability

36.44%

Ranks 17th in the U.S.

Percent of population with access to Fiber Internet

Largest Internet Providers in Alabama

When it comes to high-speed internet, homes in Alabama have plenty of options to stay connected! From bustling cities to quiet rural areas, a variety of providers offer reliable service across the state. Here are some of the biggest names keeping Alabama homes online and in the loop:

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Know Your Rights: Deposits and Complaints

Interest on Deposits: If a utility company regulated by the Alabama Public Service Commission (PSC) holds your cash deposit for more than 6 months, they are generally required to pay you interest on that deposit (typically 7% annually). This interest is often credited to your bill in December.
Disconnection Rules: Regulated utilities must generally provide a written notice at least 5 days before disconnecting your service for non-payment.
Filing a Complaint: If you have a dispute with a private investor-owned utility (like Alabama Power or Spire), you can contact the Alabama Public Service Commission (PSC) at 1-800-392-8050 for assistance.
Important Note on Co-ops & Cities: The PSC does not regulate Electric Cooperatives (like Baldwin EMC) or Municipal Utilities (like Huntsville Utilities). If you have an issue with these providers, you must resolve it directly with their locally elected board or city council.

Utility Safety for Alabama Weather

Hurricane Season (June–Nov): If a hurricane threatens the coast, never turn off your natural gas at the meter unless instructed to do so by authorities. Restoring service requires a professional technician and can take days or weeks after a storm.

Tornado Safety: Know where your main electrical breaker and water shut-off valves are located. In the event of structural damage to your home, shutting these off quickly can prevent fire and flooding.

Heat & Humidity: Alabama’s high humidity makes air conditioners work harder. Using a dehumidifier can help your home feel cooler at a higher thermostat setting, potentially lowering your summer electric bill.

New Resident Checklist: Turning on Utilities

When moving to Alabama, be prepared to provide the following to start service:

Identification: A valid government-issued photo ID (Driver's License or Passport).

Proof of Occupancy: A lease agreement or closing documents (deed) for your new home.

Deposit: Most Alabama utilities require a credit check. Depending on your score, you may need to pay a deposit equal to 2 months of estimated billing.

[tip]If you are moving from another utility provider, ask for a "Letter of Credit." Good payment history with your previous provider can sometimes waive the deposit requirement.[/tip]

Utility Costs in Alabama

The average monthly total utility bills in Alabama is $305.41, which is 10.2% higher than the national average.

Average Electric Bill

$169

Higher than national average

Average Natural Gas Bill

$112

Higher than national average

Average Water Bill

$24

Lower than national average

Assistance for Paying Utility Bills in Alabama

If you are struggling to pay your utility bills in Alabama, several state and non-profit programs can provide financial relief. While some options are available to all low-income households, specific funds exist to support seniors, veterans, and students during financial hardship.

General Assistance: LIHEAP

The most widely available resource is the Low-Income Home Energy Assistance Program (LIHEAP). This federally funded program helps low-income households manage costs associated with home energy bills, energy crises, weatherization, and minor energy-related home repairs.

How to Apply: In Alabama, LIHEAP is administered by the Alabama Department of Economic and Community Affairs (ADECA) through local Community Action Agencies. You must apply through the agency that serves your specific county.

Special Programs for Seniors and the Disabled

If you are over the age of 60 or have a disability, you may qualify for specialized assistance programs designed to prevent service disruption during extreme weather.

Project SHARE (Service to Help Alabamians with Relief on Energy): Administered by the Salvation Army in partnership with Alabama Power, this program provides emergency energy assistance to low-income seniors (age 60+) and disabled individuals.
Alabama Business Charitable (ABC) Trust Fund: This fund works with local Community Action Agencies to help cover heating and cooling costs for low-income families, with a focus on households with seniors or those facing temporary financial hardship.

Learn more in our Senior Utility Guide

Assistance for Veterans

Veterans facing housing instability or difficulty paying utility deposits and bills can access support through programs dedicated to ending veteran homelessness.

Supportive Services for Veteran Families (SSVF): Organizations like Veterans Inc. operate the SSVF program, which offers temporary financial assistance for rent and utilities to veterans who are homeless or at risk of becoming homeless.
- Apply for help: Contact Veterans Inc. or call 1-800-482-2565.
Alabama Department of Veterans Affairs: The state VA can connect veterans with local resources, including referrals to agencies that assist with gas and electric bills.

Learn more in our Veterans Utilities Guide

Assistance for Students

While there is no single statewide utility grant for students, many universities in Alabama maintain emergency relief funds for students facing unexpected financial crises (such as the loss of a job or a medical emergency) that impact their ability to pay for housing and utilities.

University Emergency Funds: Check with your institution’s Student Care, Student Life, or Financial Aid office.
- Example: The University of Alabama offers the Tide Together Student Support Fund for students in crisis.
- Example: Auburn University offers Emergency Aid for basic needs including utilities.
2-1-1 Connects Alabama: Students can also dial 2-1-1 to be connected with local non-profits and charities near their campus that offer one-time utility assistance.

Learn more about Utilities for Students

Frequently Asked Questions

Can I choose my electricity or natural gas provider in Alabama?

No. Unlike states like Texas or Pennsylvania, Alabama has a regulated utility market. This means your provider is determined by where you live. You will either be serviced by an investor-owned utility (like Alabama Power or Spire), an electric cooperative, or a municipal provider managed by your city.

What is the average cost of utilities in Alabama?

On average, Alabama residents pay about $305 per month for combined essential utilities. This breaks down to roughly $169 for electricity, $112 for natural gas, and $24 for water. Keep in mind that electricity bills can spike significantly during the hot, humid summer months due to air conditioning.

Why is my utility bill suddenly so much higher, even if my usage didn't change?

This is likely due to “pass-through” fuel costs or seasonal rate adjustments. In Alabama, utility companies are permitted to pass the fluctuating costs of fuel (like coal and natural gas used to generate electricity) directly to consumers. If the global market price of natural gas goes up, your bill will likely increase to reflect that cost.

Who do I call if my power goes out?

Always report power outages directly to your specific utility provider (e.g., Alabama Power, your local electric cooperative, or your city’s municipal utility). Most providers have a 24/7 emergency hotline or an online outage reporting tool. Do not call 911 for a standard power outage unless there is an immediate danger, such as a downed power line sparking on your property or blocking a roadway.

Do I have to pay a deposit to set up new utility service?

It depends. Most utility companies in Alabama will perform a soft credit check when you apply for service. If you have a low credit score or no established credit history, you may be required to pay a deposit (often equal to two months of estimated bills). You can sometimes waive this by providing a “Letter of Credit” from your previous utility provider showing a history of on-time payments.

What should I do if I can’t afford my utility bill this month?

Don’t ignore the bill! First, contact your utility provider immediately to ask about setting up a payment plan or a payment extension. Additionally, you can apply for state and local assistance programs like LIHEAP (Low-Income Home Energy Assistance Program) or non-profit funds like Project SHARE. (See our Assistance for Paying Utility Bills section above for more details).