BY LAUREL SMITH
MOUNTAIN CITIZEN
FRANKFORT — Kentucky regulators have ordered an independent audit of Kentucky Power Company’s management and operations, citing years of concern over the utility’s planning, decision-making and judgment.
The Kentucky Public Service Commission issued the order July 2 in Case No. 2026-00159, opening a formal investigation into Kentucky Power’s managerial and operating practices.
The PSC ordered that a “competent, qualified and independent firm” be retained to conduct a full and comprehensive audit of Kentucky Power’s management and operational efficiency. The commission also ordered Kentucky Power to pay the cost of the audit.
Once final, the audit will be publicly available. The commission said it may open another investigation after the audit is complete if additional issues arise.
Kentucky Power serves about 161,850 retail customers in eastern Kentucky, including customers in Martin, Johnson, Floyd, Pike, Lawrence and surrounding counties. The company is a direct, wholly owned subsidiary of American Electric Power Company Inc.
The order follows Kentucky Power’s rate case filed Aug. 29, 2025. In a Feb. 28 final order in that case, the PSC said arguments raised about Kentucky Power pointed to “troubling practices and behaviors” that called into question the company’s management and operation.
The commission said the Kentucky Attorney General’s Office of Rate Intervention had raised concerns about whether Kentucky Power was managing its system appropriately. Those concerns were not new, the PSC noted, saying both the attorney general and the commission had previously criticized Kentucky Power’s management and planning decisions.
The PSC pointed to several Kentucky Power applications over the past two and a half years for certificates of public convenience and necessity, saying they raised serious questions about the company’s judgment. The commission also cited concerns about Kentucky Power’s planning and decision-making related to generation and transmission investments.
In one prior case involving the Mitchell generating station, the commission said continuing to take capacity and energy from the plant was “the least bad option” for customers at the time. In the new order, the PSC said that reflected a larger and continuing problem with Kentucky Power’s failure to provide thorough and rigorous analysis before making major financial decisions.
The PSC action comes after months of public pressure in eastern Kentucky, where Zachary Tackett, a Pike County nurse and founder of the grassroots Creek Don’t Rise Coalition, has pushed local governments to demand greater transparency in any audit of Kentucky Power.
Tackett has traveled from county to county asking fiscal courts to pass resolutions urging a full and transparent review of Kentucky Power. He has also asked state regulators to reconsider a recently approved rate increase until the audit is complete.
The resolution has passed in several eastern Kentucky counties, including Martin County, and has gathered hundreds of individual signatures.
Tackett said the audit matters because Kentucky Power operates in a regulated utility system where customers have no practical choice of electric provider. That makes transparency and state oversight critical, he said, especially for low-income Kentuckians who should not be left to bear the cost of poor management decisions.
A meaningful audit, Tackett said, should examine the company’s choices, including how it procures resources and how its relationship with parent company AEP affects Kentucky ratepayers.
Following the PSC order, Tackett called the decision a turning point.
“This is the moment we’ve been working toward,” Tackett said. “A few months ago, many people believed nothing could change.”
He said the commission made its own independent decision to order the audit, but public involvement helped make clear that transparency and accountability matter.
“Citizens began asking questions,” Tackett said. “Thousands of people became engaged. County fiscal courts across Eastern Kentucky adopted resolutions calling for greater accountability. Public comments were filed. Open records requests brought new information to light.”
Tackett said the next step is making sure the audit process itself earns public trust.
“A management audit can only build public confidence if the public has confidence in the process itself,” he said.
He called for meaningful public participation and urged ratepayers to stay engaged by reading filings, attending hearings if they are held, sharing information and asking questions.
“This isn’t about being against Kentucky Power,” Tackett said. “It’s about being for transparency.”
Kentucky Power’s counsel must file an entry of appearance within 20 days of service of the July 2 order.