Kentucky’s Public Service Commission will issue a final decision this week on Kentucky Power’s request to increase rates for its 168,000 customers in Letcher County and 19 other eastern Kentucky counties where the coal industry’s decline has put thousands out of work.
Kentucky Power, a subsidiary of American Electric Power, is seeking a 9 percent rate hike for residential customers,anda3to7percent increase for commercial and industrial customers. If approved, the proposal would raise residential electric bills by an average of $12 a month and bring in $34.7 million for the company.
The PSC decision comes as other utility companies across the country announced rate cuts for their customers in response to a cut in the corporate tax rate, from 35 percent to 21 percent.
Kentucky Attorney General Andy Beshear last week joined a bipartisan coalition calling on the federal government to ensure that consumers, rather than the utility companies, benefit from the corporate tax cut.
The PSC issued an order in December requiring utility companies to track savings from the tax cut, “paving the way for those savings to be passed on to customers,” according to a PSC news release.
Beshear, whose office represents residential customers in PSC rate cases, has previously asked the commission to deny Kentucky Power’s rate increase request.
In public meetings last November, residents told PSC representatives that any rate increase would be a serious blow to a region already struggling to make ends meet.
State Rep. Angie Hatton, D Whitesburg, said some people might get disconnected and ultimately lose their homes if the PSC approves the increase.
“They’ll be turning to the state for assistance at a time when the state can least afford to help them,” Hatton said at the time. “They need an outright denial of any rate increase. We don’t want a handout, but we’ve been through enough and we just don’t want to be kicked while we’re down.”
In a news release, Kentucky Power said it needs to increase rates to offset effects of a declining customer base and decreases in usage by its remaining customers. Increasing operating costs and environmental expenses have added to the need.
“We want to have the most affordable rates that we can that still allow us to cover our expenses,” Kentucky Power spokeswoman Allison Barker said.
At a public meeting last year in Ashland, Larry Massie of Worthington, Ky., said elderly folks who already rely on churches and others in their community to pay for food and other basic expenses would be hit hardest by higher electric costs.
“To a growing number of citizens in our community, this is a significant amount of money,” Massie said. “I don’t think that we can sit back and allow the least among us to suffer any more than we have.”
Kentucky PSC spokesman Andrew Melnykovych said the commission will likely issue a final order on Thursday. This order will tell Kentucky Power how much it can increase rates, if at all.
Will Wright is a corps member with Report for America, an initiative of The GroundTruth Project. This report appeared Tuesday in the Lexington Herald- Leader.