Attorney General Luther Strange flatly rejected a request from PSC Commissioner Terry Dunn for an investigation into utility rates in Alabama.

In a letter sent Friday, Dunn asked the Attorney General to "exercise your authority under the Code of Alabama to 'institute and originate proceedings' before the Commission and join me in calling for a formal review of the operation of RSE on behalf of the customers of Alabama Power Company, Alabama Gas Corporation, and Mobile Gas Service Corporation.

"Commissioner Dunn needs to focus on working with his colleagues at the Commission to do the job the people of Alabama elected him to do," read a one sentence response provided to AL.com by the Attorney General's office Tuesday afternoon.

Dunn and fellow commissioners Twinkle Cavanaugh and Jeremy Oden are at odds over whether to hold formal hearings looking at utility rates in the state. Oden and Cavanaugh favor an informal process where utility officials answer questions from commissioners and the general public during a series of meetings. Dunn seeks formal hearings of the type used to set utility rates around the nation.

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nder Alabama law, the Attorney General is charged with ensuring utility rates set by the Public Service Commission are fair to consumers. The Attorney General is permitted to call for formal hearings for the regulated utilities at any time. At such hearings, utility officials are subjected to cross examination and must testify about their operations costs and charges under oath.

Such hearings have not been held in Alabama since 1995. Instead, for the last 18 years, the state's utility rates have been set under a system known as Rate Stabilization and Equalization. Under the system, utilities are granted automatic rate increases provided their profits remain within an allowed range and the PSC commissioners approve their operating costs.

Dunn's letter suggests "that a formal review of RSE is long overdue and should be undertaken in lieu of the informal process that is now under way."

Utility regulators in other states said formal hearings are held every year or so for each regulated utility and are critical to ensuring that utility rates were fair.

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avanaugh, who did not respond to a request for comment on Dunn's letter, has suggested repeatedly that formal hearings of the type routinely held around the nation would be taken over by "extreme environmentalists."

"The idea that environmentalists (radical or otherwise) or senior citizens represented by a "liberal gang" of out-of-state lawyers would "hijack" formal proceedings is a transparent fabrication," reads Dunn's letter. "That the threat of their taking over a Commission proceeding was voiced by the PSC President is discouraging, to say the least, given that she would preside over any such proceeding."

The Alabama chapter of the American Association of Retired Persons supports Dunn's call for formal hearings.

"Mobile Gas, Alabama Gas, and Alabama Power are allowed to earn a larger percentage of profits than utilities in any other state," said Jesse Salinas, State Director of AARP Alabama. "We believe the Public Service Commission should hold regular audits and formal hearings into the rates of big utilities, like every other state... A