State Competitiveness: Alabama

Rank: 12

of 12

Southeastern State Data Comparison

Percentages indicate the share of total possible points achieved. See state data table for additional detail.

Alabama: 22.4%

Average: 42.88%

Median: 41.87%

Highest: 60.47%

Lowest: 22.4%

Alabama's overall score places it in the lowest tier of competitiveness.

Strengths in Power Sector Competitiveness – Categories with Full or High Scores

Indicator	Strength	Sourcing
Option for Municipal Ownership of Utilities	Alabama permits municipal ownership of utilities statewide, subject to certain requirements.	Nicholas Institute, American Public Power
Consumer Advocate	Alabama has a state consumer advocate office that represents ratepayers.	NARUC

Opportunities in Power Sector Competitiveness – Categories with Low Scores

Indicator	Strength	Sourcing
Third-Party Power Purchase Agreements (PPAs)	Alabama does not permit third-party PPAs.	DSIRE
Net Metering	Alabama does not have a state policy; limited utility program exists.	DSIRE
Residential Retail Choice	Alabama does not permit residential electricity customers retail provider choice.	ACCES, NREL
Commercial and Industrial Retail Choice	Alabama does not permit commercial electricity customers retail provider choice.	ACCES, NREL
Customer Concentration	Alabama's electric utility sector, including distribution utilities, is highly concentrated. The state has a customer concentration (HHI) score of 3,210, which exceeds the 1,800 threshold that signals a highly concentrated market. This indicates that a small number of utilities serve most customers in the state, suggesting limited competition.	Nicholas Institute, DOJ
Generation Concentration	Electricity generation in Alabama is provided by a small number of power producers. The state has a generation concentration (HHI) score of 2,686, which exceeds the 1,800 threshold that signals a highly concentrated market, indicating that electricity production is controlled by a small number of entities, suggesting limited competition.	Nicholas Institute, DOJ
Interconnection Standards	Alabama does not have statewide interconnection standards, but its largest utility (Alabama Power) does have a policy on interconnecting distributed resources.	DSIRE, NREL
Procurement Requirements	Alabama does not have an overall formal requirement for competitive solicitations, but does have a requirement for limited competitive procurement for renewables.	RMI
Market Participation	Alabama does not participate in a wholesale market but does participate in bilateral trading through the Southeast Energy Exchange Market (SEEM).	FERC, SEEM
Civil Society Participation Role in Wholesale Market	Alabama does not participate in a wholesale market.	Lenhart and Fox 2022, FERC
State Authority Role in Wholesale Market	Alabama does not participate in a wholesale market.	Lenhart and Fox 2022, FERC

Information provided above are brief summaries only. Any errors or omissions are unintentional. Policies and programs are subject to change. Multiple policies can impact an issue. Some policies may have details or limits not listed above. This review is current as of fall 2025.

See Methodology for full details and sources.

Consumer category: Captures consumer facing policies and programs that empower individual consumers or large energy users to make decisions about their electricity usage, providers, or rate structure.

Structure category: Captures regulatory frameworks and utility sector features that impact or characterize the state electricity sector broadly.

Regional Market category: Captures participation in multi-state energy markets and transmission organizations that manage large-scale electricity dispatch and components of their governance that support broad involvement.

Alabama's Top 5 Utilities (by electric retail sales)

Note: These values are based on direct retail sales to customers, not overall wholesale power. (Source: EIA 861, 2024)

Utility Name	Ownership	% State Retail Sales (MWh)	% State Retail Customers
Alabama Power Co.	Investor Owned	59.3%	55.3%
Tennessee Valley Authority	Federal	6.6%	0.0004% (see note)
City of Huntsville	Municipal	2.1%	1.7%
Joe Wheeler Electric Member Corporation	Cooperative	2.1%	1.7%
Baldwin County Electric Member Corporation	Cooperative	1.9%	3.3%
Total Top 5 Utilities (by retail sales)		76.0%	68.1%

Note: TVA provides wholesale power to distribution utilities, which are considered TVA’s customers in AL in this value.