2017-08-09 / Front Page

Power company reduces rate hike request

Kentucky Power Company announced Tuesday it is lowering its proposed increase by about two percent for residential customers and about one percent for businesses.

Kentucky Power filed an application with the Kentucky Public Service Commission on June 28 to increase residential power rates by 16.8 percent and business rates by eight to 15 percent. News of the company’s proposal was met with anger by many of its customers, some of whom organized a well-attended protest in downtown Whitesburg.

The new rates would take effect in January if the Public Service Commission approves the company’s application. On average, January is the coldest month of the year in Kentucky with the highest power bills.

“We worked with our bankers to refinance about $325 million in existing long-term debt, similar to how a homeowner might refinance a mortgage,” said Kentucky Power President Matt Satterwhite. “We were able to reduce our interest rate by about 3 percent and we are pass- ing that savings onto customers.”

Kentucky Power filed an update to its application Monday that would change the proposed base rate increase from $69.6 million to $63.3 million. The update also includes an additional $1.9 million less revenue from riders. The interest savings reduces the Environmental Surcharge and the Big Sandy Retirement Rider, which is being renamed the Decommissioning Rider to reduce confusion. The total rate request reduction is $8.1 million, according to a press release from the company.

Kentucky Power provides electrical service to about 168,000 customers in all or part of 20 counties in eastern Kentucky. It is an operating company of American Electric Power, one of the largest electric utilities in the United States, according to Kentucky Power. AEP also owns the nation’s largest electricity transmission system.

AEP provides service nearly 5.4 million customers in 11 states.

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