BY ROGER SMITH
MOUNTAIN CITIZEN
FRANKFORT — Residential customers of Kentucky Power will experience an average monthly bill increase of approximately 5.66%, or about $8.32.
This increase approved Friday by the Kentucky Public Service Commission is significantly lower than the original 18.3% hike proposed by Kentucky Power in July 2023.
Kentucky Power’s application also included requests for a distribution system cost tracker, tariff name changes, amendments to bill due dates and a power hedging program, among other items. The utility initially proposed an annual increase in its electric rates of $93.9 million.
The PSC conducted public comment hearings in Catlettsburg, Hazard, Pikeville and virtually, and an evidentiary hearing Nov. 28-30, 2023.
In November 2023, Kentucky Power and certain parties to the case offered a non-unanimous settlement that reduced the overall revenue increase to $74.67 million. The settlement was reached between Kentucky Power and several intervening parties (Kentucky Industrial Utility Customers, Walmart, Mountain Association, Appalachian Citizens’ Law Center, Kentuckians for the Commonwealth and Kentucky Solar Energy Society) before the evidentiary hearing. Two other intervenors, the Kentucky Office of the Attorney General and SWVA Kentucky LLC, did not sign but did not object to the settlement.
Friday’s order reduced the agreed-upon increase in the proposed settlement by an additional $14.63 million.
In making its decision, the PSC found the proposal’s impact on residential customers to be “excessive and disturbing.” That finding was due in part to public comments in the case indicating customers could not afford further rate increases.
“The number of comments the Commission received and the turnout at the public meetings was significant,” the PSC order stated.
The PSC approved Kentucky Power’s proposal to move the due date of bills back six days, from 15 to 21 days, to allow customers more time to pay.
The order denied the utility’s request to begin power hedging programs and a proposal to add a tracker to recover distribution-related expenses between rate cases.
In a related decision Jan. 10, the PSC authorized Kentucky Power to finance around $470 million in costs through securitized bonds, a method enabled by recent Kentucky General Assembly legislation. This approach, replacing traditional rate increases, could save customers at least $74.4 million over 20 years. It also eliminates shareholder returns on the $470 million of expenses for Kentucky Power.
Kentucky Power, an investor-owned utility headquartered in Ashland, provides service to approximately 163,000 customers in all or part of 20 eastern Kentucky counties.