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Ky. Power officials listen to criticism, talk about outages



When District Two Magistrate Archie Banks told representatives of Kentucky Power Company, “You’re asking us to pay for your mistakes,” it summed up the feelings of many of the group of more than 250 people who crowded into the Letcher District Courtroom and adjoining hallway for a meeting called by Commonwealth’s Attorney Edison Banks on the subject of Kentucky Power.

Archie Banks’s statement was just one of many from elected officials and citizens saying Kentucky Power’s negligence in keeping rightsof way cut contributed greatly to the devastating power outages that kept many Letcher County residents in the cold and dark through the Christmas holiday and caused thousands of people to lose the entire contents of refrigerators and freezers. The power company also drew harsh criticism for its proposed 35-percent rate residential rate increase.

Commonwealth’s Attorney Banks opened the meeting by telling the audience he called the gathering to examine American Electric Power’s poor right-of-way maintenance. AEP, based in Columbus, Ohio, is the parent firm of Kentucky Power. Banks said he did not know about the proposed rate increase at the time he called the meeting. He said his focus was on three issues: How long was the power off , what was the cause, and were there any unusual hardships experienced by residents of the county?

Kentucky Power President Timothy Mosher introduced Darrell Wagner, the company’s Director of Service, and Mike Lasslo, who manages Kentucky Power’s Hazard operation. Mosher told the crowd the power company officials were there to listen and to attempt to help the public understand why the company has asked the Kentucky Public Service Commission for a rate increase.

Letcher County Judge/Executive Jim Ward told Mosher he had several questions about the duration of the outage and if there would be any possible reimbursement for people who lost everything in their refrigerators and freezers during the outage. Ward asked who would pay for overtime for county workers, many of whom he said worked almost continuously during the outage. He also asked about the food and water handed out by county workers.

“We were out 24/7, the county rangers, rescue squads, and county workers,” said Ward. “We kept senior citizens centers open continuously, two with generators and kerosene heaters. The magistrates and I were out continuously. I also want to ask why the rights-of-way haven’t been cleaned up. You keep them clean in other places, why not in eastern Kentucky?”

Letcher County Attorney Harold Bolling presented a list of questions and complaints which had come to him from citizens. He said he was particularly concerned about several areas, including the handling of homes without electricity that housed handicapped and seriously ill people, the issue of reimbursement for people who had lost everything, and what procedures Kentucky Power has in play to reimburse them, and the neglect of rights-of-way.

“I’ve probably had 1,000 calls about these issues,” said Bolling. “I understand the difficulty, but for many people, it took very simple things to get their power back. Why were people with special needs not addressed? How will people be compensated? Will they be compensated? A number of citizens have told me they have complained about right-of-way issues near their homes for years. Morgan Reynolds over in Seco, a former South Central Bell employee, said he has repeatedly requested clearing. These are very common issues. How do you go about deciding which rights-of-way to clear, if you decide? Do you have a plan?”

Bolling said he felt Mosher should publicly acknowledge whether there would be any reimbursement for the people who had lost food and that each person should be allowed to decide the course of action they would take. He said he was particularly anxious to learn if Kentucky Power had a long-range plan to address the rights-of-way to prevent further outages.

“People shouldn’t have to fight to have electricity,” said Bolling. “They pay their bills and they want it. I’m concerned about a long-range plan too. Will you step up to the plate and do the right thing?”

District Five Magistrate Wayne Fleming said he had spoken to a lot of people who lost every electrical appliance they owned because of power surges. He added that workers from Arkansas had told him that the condition of rights-of-way in Letcher County reflected the worst rights-of-way management they had ever seen.

“I want to know how you would have the gall to ask for a rate increase,” said Fleming, and then he directed his next question directly to Mosher. “Will you accept a $1 million bonus this year and put a rate increase on a poor old lady who is barely making it?”

District One Magistrate Bobby Lewis echoed Fleming’s question, asking how Kentucky Power will deal with people who are on fixed incomes, many of whom are already having problems paying record high power bills before the rate increase even comes into effect.

“Will you cut their power off?” asked Lewis.

“Sure, yes they will,” came a response from the crowd.

Lewis also asked how often rights-ofway are cleared and Magistrate Banks said he had also spoken with workers from Arkansas who told him the maintenance on rights-of-way in Letcher County was ridiculous.

“One man told me he had worked in Arkansas for 30 years and had never seen anything like it,” said Archie Banks. “Our local guys work hard. It’s not these guys I have a problem with. Our county attorney will look into your business and stock payments, because you’re sure not putting it back into the process. You double your bills every December. I just wonder what it will be next month. A 35-percent rate increase is the most ridiculous thing I have ever heard.”

District Three Magistrate Codell Gibson expressed concern about the ability of Letcher County residents to handle a 35-percent rate increase.

“Most people can’t take a rate increase,” said Gibson. “They (Kentucky Power) will cut you off . They don’t care if you freeze. They couldn’t care less.”

Commonwealth’s Attorney Banks reminded the audience not to kill the messenger and told them that the session was being recorded and their comments would be played for the Public Service Commission during its deliberations on the rate hike. Then Kentucky Power District Customer Services Manager Mike Lasslo took the floor to explain the situation that occurred during the outage.

“This was the worst outage I’ve experienced in 32 years,” said Lasslo. “It was already very wet, the soil was saturated, and a windstorm one week before had caused a lot of outages. Then a heavy, wet snow broke trees and limbs.”

Lasslo told the audience that a lot of lines had been trimmed, and that Kentucky Power spends millions of dollars on rights-of-way management. He added that company workers were also overextended during the outage, often working 16 hours a day. Lasslo said weather forecasts leading up to the Friday snowstorm had not called for so much snow, although others said they had heard forecasts calling for eight to 10 inches. He said that because of the mild forecasts, his office decided not to bring in outside help and was caught unaware. He said the dispatch center in Hazard was opened around 7 p.m. and had work crews out Friday night, but by Saturday the weather was so bad Kentucky Power’s own workers were stuck and the company started asking for help.

Lasslo said by then Virginia and other surrounding areas had gotten the nearby work crews, so Kentucky Power had to call for help from Ohio, Mississippi, and Arkansas. He said Letcher County had 8,500 homes without electricity, or 92 percent, Knott County had 82 percent without power and Perry County 45 percent.

“This was a disaster beyond disasters for us,” said Lasslo. “We had over 100 broken power poles, 27 in Letcher County.”

Lasslo said that usually 64 people work in Whitesburg and Hazard and there are an additional 77 who work for Asplundh, a tree cutting company that contracts with Kentucky Power. Lasslo said he asked for 250 additional workers from other states, but due to the distances they had to travel, most didn’t get here until Tuesday. He added that the weight and density of the snow and the “challenging terrain” exacerbated the diffi culties of repairing the downed lines.

Lasslo also addressed the rights-of-way issue, telling the audience that Kentucky Power tries to maintain a 40-foot right-ofway, with additional distance on the uphill side. He said the workers began to try to restore power from the power stations out, doing the main branches first. He added that it would be useless to start at farther branches, since they wouldn’t be able to get power until the main lines were fixed anyway. Lasslo said it created a bad situation for special needs people in hollows and at the end of branch lines. He added that many of the outside workers said they were outside their comfort zone here due to the terrain.

In response to a question about running power lines underground, Lasslo said it would cost $64 billion to put all the lines in the United States underground, which would cause an additional $300 to be added to every bill in the country. He also claimed that many of the trees that had fallen on power lines had come from above rightsof way and slid down the hill.

“They’re not our trees,” said Lasslo. “Trees cause about half of outages.”

A man in the audience then said the contractors hired to clear rights-of-way cut just enough to clear lines without accounting for annual growth. Another asked why not hire local people during good weather to clear the rights-of-way and then sell the trees to local mills, increasing jobs and income. A number of others had complaints about the quality of work from the contractors who cut the trees. One citizen, Vanessa Hall, asked about the discrepancy between home rate increases and industrial rate increases.

Darrell Wagner weighed in for Kentucky Power and said that for years, industrial rates have been higher and have subsidized home rates and kept them lower. This, although for years the state has claimed in industrial recruitment ads that Kentucky’s industrial electricity rates are among the lowest in the nation. Wagner said that if the state wants to attract industry, the people would have to bear the brunt of the rate hikes.

Hall told Wagner that she thought the idea didn’t make a lot of sense.

“I’m not making a profit in my home,” said Hall. “But you want to increase my bill by 35 percent. You are going to raise my rate so you can attract a factory to pay a lower rate, so I’ll buy more of that tacky plastic to put on my windows. Who made that decision? Don’t pass your mistakes on to me.”

Stan Osborne, a member of the Fleming- Neon Volunteer Fire Department and Pine Mountain Search and Rescue, told Wagner that AEP’s stock had gone up 13.4 percent over the past year and that AEP has 176,000 customers. Osborne said with that volume of customers, if it just asked for a $50 increase from each customer, AEP could gain about $8.8 million per month. He said the proposed 35 percent would garner an additional $11.8 million a month.

“That’s absurd,” said Osborne. “When the crap hit the fan, local guys busted their butts. Would this have happened in Frankfort? Hell no. I know we have diff erent terrain. They have difficult terrain in Montana, but they take care of their lines there. If you would spend the money necessary to clear the rights-of-way, why not hire local people to clear them? Put the money back here. I guarantee that we have local people who can clear rights-of-way safely and economically.”

Jerry Collins of Millstone then asked County Attorney Bolling if there was any way the citizens of Kentucky could make sure the Public Service Commission actually serves the people. Collins also asked if Kentucky Power could be replaced. Bolling replied that the members of the PSC are political appointees, appointed by the governor, and the power company is a private corporation, although it also has rights as a public utility. He added that AEP is a corporate entity, profit making with a corporate make-up and is run from the top down.

“How can we get rid of them?” asked Collins.

Tim Mosher then weighed in and told Collins that AEP is a regulated monopoly.

“We are in business to provide a return to our investors,” said Mosher. “We employ 250 people in Kentucky. Some of the information I will share with you, you won’t want to hear. This is being recorded and will be shared with the Public Service Commission. Hearings will be held by the PSC in Frankfort. We sent out 175,000 letters to inform people and we paid the postage.”

Mosher than claimed that the outages were caused by an act of God, and an audience member shouted, “Not my God.”

“We did not cause the snowstorm,” said Mosher. “If it wasn’t your God, I don’t know who it was. We can’t be held responsible for the loss of food and equipment. It was an act of nature. We do have a fund set aside. We spend $7 million each year clearing rights-of-way. A lot of the problem is not in the rights-of-way, it is trees sliding down the hills.”

Mosher said that Kentucky Power keeps records of customers with special needs if it is informed of them. He said the company checks immediately and if it can get in touch with them, it tells them they should leave until they get their electricity back.

Mosher said that the timing of the rate hikes couldn’t have been worse. He said rate hikes are based on a “test year,” a one-year record, and that timing happened to fall during the time of the outage.

“In September, the return on our investment showed it was time to raise the rates,” said Mosher. “We have to file within 90 days of the test year. So on December 22 we had an ad in the newspapers and sent letters to homes. If you want to throw us out, you can go to the PSC and say you want somebody else.”

“You said the power company would not be responsible except for neglect,” said Judge/Executive Jim Ward. “In my opinion, you neglected the rights-of-way.”

“You have a right to that opinion,” said Mosher. “And you have a right to go to the Public Service Commission.”

Mosher also told the audience that there are ways to keep costs down by using energy efficient appliances, fluorescent light bulbs, and other energy saving measures. He said that the rate increase would provide extra money to address what he referred to as “vegetation management.”

“How do you expect us to pay?” asked Ward.

“You have to use kilowatts as efficiently as you can,” replied Mosher. “You can cut utility use by decisions you make. The PSC will examine every dollar. It will all come out in the hearing process.”

One audience member asked Ward if LKLP and Letcher County Senior Citizens would provide buses to take interested parties to the PSC hearings. Mosher said the hearings have not been scheduled yet but would probably take place in April. Judge Ward said the county will work on a way to get people to the hearings.

Complaints from the crowd primarily settled on three issues — the duration of the outrage, the maintenance of the rights-ofway, including accusations that tree cutters did not do their jobs, and the size of the rate increase. About 50 people addressed the panel from the podium and some told stories of hardship caused by the outage.

Letcher County author Sam Adams told the panel he had to take his mother to Lexington because she is chronically ill and needed to be in a place with electricity for her treatment, only to have his power restored the next day so he had to go bring her back, forcing her to endure two long trips in two days.

Jerry Collins said a lack of communication had caused a number of problems. He said the telephone lines at AEP were jammed and he couldn’t get through for hours, only to get a computerized recording when he did finally make contact. Marie Pratt said she lost the entire contents of her freezer, including her Christmas dinner, and lost several appliances because of the power surges.

Willie Farley of Democrat told Mosher that the rights-of-way where he lives have never been cleared and the “tree people” just sit in their vehicles for eight hours a day for two weeks when they do come.

“You need to clean up Asplundh’s act,” Farley said in reference to one contractor. “They aren’t the only tree company. Somebody dropped the ball. It’s a shame you come in here and ask for a 35-percent rate hike and you are in the wrong and you know you’re in the wrong.”

Derek Cooke, who works as a mine inspector, told the panel that the 35-percent figure was simply a negotiating ploy. He added that if any of the mines he inspected took such poor care of high voltage cables as Kentucky Power does, they would be closed immediately.

“Has anybody ever gotten a 35-percent raise?” asked Cook. “The problem is the lines are still too close to the trees. Negligence is what it was. Nobody cleared the lines. My neighbors and I have had people cut our trees for years because you wouldn’t. You can’t ask for 35 percent. Even if we have to take up donations and bake cookies, we’ll be at the PSC meeting”

Sergent resident Buddy Sexton added that he had asked for trees on his property to be cut several times only to be told that they could only be trimmed. He also said that many older people in Letcher County are not computer users and are not comfortable talking to a computer. Edison Banks’s mother, Sue Banks, said when she finally got to talk to a person at AEP, they didn’t even know about the situation.

“I wonder why we don’t get respect in eastern Kentucky,” said Mrs. Banks. “Why do we always get the short end of the stick? I don’t ask anybody to pay my bill, but I lost four containers of insulin. You say it’s an act of God, but it had a lot to do with ignorance.”


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