BY MARY CROMER

Kentucky Power is asking the Public Service Commission to approve yet another rate increase—its third since 2020. Bills have already risen nearly 40% in that period.

This time, Kentucky Power is asking for an average 14.9% increase in residential bills. But not everyone’s bills would go up by the same amount. Instead, Kentucky Power wants to structure the increase so customers who use the least amount of electricity would see the greatest proportionate increase. A customer who uses only 600 kWh in one month would see their bills increase 28%. A customer who uses 2000 kWh would see their bill increase by 10%. It is clear that penalizing those who use the least electricity benefits Kentucky Power. The proposal ensures that it gets paid more regardless of how much customers may try to cut back on electricity use to save money.

Specifically, Kentucky Power proposes a two-tiered rate structure where the first 600 kWh of electricity used would cost around 16 cents per kWh, while any usage above 601 kWh would cost around 13 cents per kWh. At the same time, they propose to raise the base rate (the amount each customer must pay each month to have metered service) to $26/month for usage at 2000 kWh/month or less and $40/month for usage above 2000 kWh/month. The current base rate is $20/month for all customers.

The company claims that it is looking out for those low-income customers who use a lot of electricity because their housing is old and inefficient. But, to meet the needs of those ratepayers, Kentucky Power should invest more in its weatherization and efficiency programs across its service territory. The company provided weatherization assistance to only 50 of its customers last year. The need is so much greater. Investments in household energy efficiency not only save customers money, but can also reduce the need for more expensive investments in new power plants.

The catch is, the company profits from new power plants, not from saving money for its customers.

Kentucky Power again claims the rate increase is necessary due to declining population—spreading costs across fewer customers means higher rates. But continual rate hikes can’t be the solution. A 2022 Kentucky Data Center report projects that all counties in Kentucky Power’s service territory will lose population between 2020 and 2050, with an average decline of 26.5%. Four counties are projected to lose over 40% of their population in that period, including Martin County at 43%. Higher rates will only accelerate this exodus as residents and businesses relocate to areas with more affordable energy.

At the PSC’s Nov. 20 public hearing in Pikeville, all 50+ attendees opposed the increase. Many noted that electricity in neighboring states like Tennessee costs far less, with several saying they may leave because they can’t afford their bills. Continually raising the cost of essential services like electricity will drive even more people away. Without a change in trajectory, fewer customers will pay increasingly more for deteriorating service. Something has to give.

While Kentucky Power is wringing its hands about having to raise rates to meet its expenses, its parent company AEP posted a record $1 billion profit in the third quarter of 2025. Company representatives stress that Kentucky Power isn’t generating that profit. Still, there is a huge amount of profit being made. Kentucky Power is asking its customers to tighten their belts even more to budget for another in a succession of rate increases. It’s time for the company to get serious about how it is going to continue to provide adequate, efficient, and reasonable service that is also affordable in the face of population decline.

Some rate increase is likely inevitable, and Kentucky Power will likely soon request another. But any approved increase should be tied to performance. The PSC should require the company to better serve low-income customers by setting specific goals to reduce disconnections for non-payment and customer arrearages. Future decisions on the company’s allowed return on equity should then depend on meeting those goals. Linking profit to how the company serves its low-income customers in the face of population decline will force the company to solve the real problem: providing affordable energy service in a region with a declining population.

The Public Service Commission wants to hear from Kentucky Power customers. They are hosting two more public comment sessions: Dec. 18 at 5 p.m. at the Perry County Courthouse and Jan. 8 at 5 p.m. at the Ashland Transportation Center. At those sessions, each person who signs up to speak is given five minutes. Members of the PSC will be on hand, will provide a general presentation on the case, and can answer questions about the process they use to make their determination. At the Pikeville session, Kentucky Power had several representatives in the audience. It is a good opportunity to make your voice heard.

The PSC also accepts written comments by mail or by email. To submit written comments, include your name, whether you are a Kentucky Power customer, and reference Case No. 2025-00257. Mail comments to: PSC, P.O. Box 615, Frankfort, Kentucky 40602 or email to psc.comment@ky.gov.

Mary Cromer is the deputy director of the Appalachian Citizens’ Law Center.