By Donald V. Watkins ©Copyrighted and Published on June 28, 2019
In 2017, the Alabama Power Foundation, Inc. (APF), awarded $9,679,493 in grants to deserving entities. APF reported total net assets of $133,330,302 for 2017.
APF offers grants to nonprofit organizations in Alabama and elsewhere that are working in the following areas: (a) educational advancement, (b) civic and community development, (c) arts and cultural enrichment, (d) health and human services, and (e) environmental stewardship.
According to APF, “priority is given to projects that address underserved segments of the population, such as racial or ethnic minorities, people experiencing poverty, or underprivileged communities with fewer opportunities.”
APF is funded by donations from Alabama Power Company shareholders. Because Alabama Power set its own rates, as discussed below, the ratepayers in Alabama indirectly contribute their fair share of money to APF, as well.
I recently reviewed APF’s IRS Form 990-PF for 2017, dated November 9, 2018, to determine the winners and losers in APF’s funding sweepstakes. The results stunned me.
Alabama Power Company is in a Class by Itself
Alabama Power Company generated $6 billion in gross revenues in 2018. The company’s net income after payment of operating expenses and shareholder dividends was $930 million. This amount represents an increase in net income of $82 million, or 9.7%, over the previous year.
According to Advanced Energy Economy’s Power Portal database, which tracks ROE for over 100 publicly-owned utilities across the country, the highest ROE allowed by a public utility commission belongs to Alabama Power Co., at 13.75%. This ROE places Alabama Power in a class by itself. Furthermore, Alabama taxpayers guarantee Alabama Power a five percent minimum annual return on the company’s equity. If there is a shortfall in this guaranteed minimum return on equity, taxpayers must make up the difference.
Instead of making a case for rate increases, Alabama Power Company uses a formula-based ratemaking process (called the “Rate Equalization and Stabilization” formula) to effectively adjust its rates each year without any public evidentiary hearings and without any participation by ratepaying consumers.
In 2015, Alabama Power overcharged its customers by $146 millionthrough a fee used to cover fuel costs. Instead of issuing refunds to customers, as required by law, Alabama Power simply reduced its energy cost recovery in 2016 by $120 million dollars.
The company’s last rate decrease was in 2016. Its last rate increase was in 2017.
APF Winners and Losers
The first thing I noticed was the salary paid to Myla Calhoun, who works 24 hours per week as APF’s president and who made $164,078 in 2017. The average Foundation Director salary in Alabama is $132,592 as of May 31, 2019, but the range typically falls between $108,692 and $164,446. Myla Calhoun is definitely a WINNER.
Second, since 1991, APF has operated a scholarship program for the children of employees of Alabama Power Company. Each recipient receives an award of $2,500. In 1995, APF expanded the program to include Presidential scholarships. These scholarships provide 4 years of undergraduate tuition and mandatory fees at one of Alabama’s colleges and universities. The employees/parents of APF’s scholarship recipients are big-time WINNERS.
Third, the Auburn University Foundation received $2,475,324 from APF in 2017, which dwarfed the amounts received by Alabama State University ($50,000), Alabama A&M University ($25,000), Tuskegee University ($25,000), and Spelman College in Atlanta, Georgia ($5,000). Historically black Oakwood College in Huntsville, Stillman College in Tuscaloosa, Miles College in Birmingham, and Talladega College in Talladega were left out in the cold.
The Auburn University Foundation received 25.5% of the total $9,679,493 in grants awarded in 2017, The University of Alabama at Birmingham (UAB) Educational Foundation received $200,000, and Samford University in Birmingham received $60,605.
APF has committed another $2,000,000 in future funding to Auburn University. UAB was assured of $200,000 for its capital campaign and $300,000 for its athletics program. Auburn University and UAB are clear WINNERS.
Fourth, the Crimson Tide Foundation received $10,000, while the Miles College Booster Club received $2,500. The Crimson Tide Foundation is a WINNER.
Fifth, the Eagles Landing Christian Academy, which was founded under the name of McDonough Christian Academy in 1970 as a private school for white students fleeing public school desegregation in McDonough, Georgia, received $1,172 in 2017. Given its troublesome history, this school is a WINNER.
Sixth, the Hispanic Interest Coalition of Alabama, which is headquartered in Birmingham, received $31,000, while the Mexican Orphans Missions in Birmingham received $45,000. These organizations are WINNERS.
Seventh, mega-churches in the Birmingham area fared very well. For example, Canterbury United Methodist Church in Mountain Brook received $10,000 in 2017. The Church of the Highlands in Birmingham received $5,000. Dawson Memorial Baptist Church in Birmingham received $15,000. Meadowbrook Baptist Church in Birmingham received $10,000. The Sixteenth Street Baptist Church in Birmingham, which was the site of the 1963 church bombing that killed four little girls during the Sunday School hour, received $10,000. These churches are WINNERS.
Eight, the Alabama Special Olympics received $1,000. The Alabama Institute for the Deaf and Blind received $1,500. The Association for Retarded Citizens received $140. Arts ‘N Autism, Inc. received $1,000. Alabama Senior Olympics received $500. These organizations, which help physically and mentally impaired children/adults/seniors, are clear LOSERS in the funding sweepstakes.
Ninth, the Congressional Black Caucus received $10,000. Dr. Martin Luther King’s Southern Christian Leadership Conference received $50,000, while the Martin Luther King Center for Non-Violent Social Change received $10,000. The NAACP received $1,000, while the National Council of Negro Women received $100. The National Voting Rights Museum and Institute in Salma received $5,000. The United Negro College Fund received $10,000. Given the meager amounts APF awarded to these important social justice organizations, they must be viewed as LOSERS.
The Sickle Cell Disease Association, which fights the Sickle Cell disease that primarily affects black people, received $500 in 2017. The Association is a LOSER in the APF funding sweepstakes.
The National Society of Black Engineers in Alexandria, Virginia received $50,000. It is a WINNER.
In contrast, funding for animal safety and welfare programs (i.e., dogs, cats, horses, fish, and wildlife in open habitats and in zoos) totaled $222,775 in 2017. The animals in these programs are clear WINNERS, especially when compared to the anemic funding for organizations with missions dedicated to advancing and protecting the safety and welfare of African-Americans. This is especially true in light of the fact that APF has committed another $300,000 in future funding to the Birmingham Zoo.
Are APF’s Awards Equitable?
Alabama Power enjoys a protected monopoly status in the state’s utilities industry. Blacks in Alabama make up 26.2% of the state’s population and nearly 25% of Alabama Power Company’s retail customers. Yet, APF awarded less than 5% of its direct grants to non-profit organizations that serve the needs of the black community.
This disparity is not a one-time glitch for 2017. It is a trend that is reflected in APF’s IRS Form 990-PF for tax years 2016, 2015, and 2014.
This is not “Happy News.” This is the cold, hard truth.
PHOTO: Alabama Power Foundation logo.
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