2017-06-28 / Front Page

Kentucky Power’s proposed rate hike drawing opposition

By SAM ADAMS

Kentucky Power Company is seeking broad increases in its rates and riders from the Kentucky Public Service Commission, a move that if approved would raise residential power bills by a company estimate of 16.84 percent.

However, residential bills are not the only way the rate hike would increase the costs to consumers. The proposed tariff changes would also increase the amount charged to commercial customers by up to 10.59 percent, schools by up to 14.11 percent, and cable television companies by up to 66.02 percent for attachment of cables to Kentucky Power utility poles.

Large businesses such as a big box retail stores and grocery stores could see increases of more than $600 a month on average, with many rising far beyond that.

Some of the increase would be for rate billing, and some would be for service charges and other tariffs and riders.

The Kentucky Cable Telecommunications Association is expected to intervene in the rate increase request, seeking to stop or reduce the increase.

Archie Everage, vice president and general manager of TVS Cable, said increase for pole attachments will drive up the cost of doing business for cable companies throughout the Kentucky Power service area.

“Our association is going to oppose it, and others will oppose it, too,” Everage said.

For a home with a $300 power bill now, the bill after the rate increase would be $350.52, according to figures posted by Kentucky Power. For what the company says is an average residential customer with a bill of $142.20, the bill would increase to $166.14.

If the new rates are approved, residential service rates will increase to 10.853 cents per KWH from 8.795 cents. Small general service rates would nearly double to 20.636 cents per KWH from 11.510 cents during the summer. Large general service, which includes businesses such as big box retail stores and grocery stores, would see a series of changes to the rates charged for voltage and for usage. Their bills increase on average by 9.17 percent a month to an average $7,281 monthly bill.

Gwen Christon, owner of Isom IGA, said her most recent bill was $7,600. Under the new rates, it would increase to an estimated $8296.92.

“I have four walls with a grocery store inside, and I have to look at the power bill, the insurance bill and all those things that I have no control over first,” she said. “I have to pay those and then pay everything else out of what’s left.”

An increase of nearly 10 percent in the electric bill could mean layoffs for employees, higher prices for customers, Christon said. It also means she’s watching the money disappear that she hoped to use to pay off $300,000 in upgrades she just made to her store to cut her power usage.

“I was paying an $11,000 electric bill. That dropped to $7,600, but I had to pay $300,000 to do it,” she said. The loan she had to take out to make the improvements was to be paid off over 15 years with the savings on the power bill, but the rate increase will take up much of that money.

“The cost of doing business for small independents is getting so high, it’s hard to survive,” she said.

Christon said with increased residential bills, she can see her customers having to look for a second or third job, but those jobs won’t be there because businesses will have to cut back to pay their own power bills.

“I’d like to be able to stop it, but we’ve never been able to stop it before,” she said.

A spokesman for the Kentucky Public Service Commission said the application for the rate increase can’t be filed until after legal advertising is completed.

The company is running a legal advertisement detailing the proposed rate increase in The Mountain Eagle and other qualifying newspapers in the region. The six-page ad began running last week.

Among the other changes Kentucky Power wants is a decrease in the amount of money it would pay customers for power from home generating systems such as solar panels or wind turbines, and a change in the name of the Big Sandy Retirement Rider.

Customers have complained about the rider, which pays for tearing down and cleaning up the Big Sandy Generation Plant at Louisa.

Under the new billing requested, the Big Sandy Retirement Rider will be called the Decommissioning Rider, “to avoid confusion regarding the purpose of the rider.”

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