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Says PSC should put people before Kentucky Power

County official responds to letter

To the Editor:

There is so much wrong with the Kentucky Public Service Commission’s January 29 letter to the editor of The Mountain Eagle that it’s hard to know where to start and what to include.

The letter from the Public Service Commission says: “By far the single largest factor in determining the amount of an electric bill every month is consumption — how much electricity an individual customer uses.”

I don’t know what “by far the single largest factor” means in the eyes of the PSC, 80 percent? 90 percent? But it doesn’t matter. Anything 60 percent or higher is wrong. Clearly, the spokesman for the PSC needs to go back to school and take some refresher courses in math. The “single largest factor” in a bill is the amount of electricity used, multiplied by the rate the PSC has set for consumption. So how much electricity a customer uses is at best half the equation, not “by far the single largest factor.” The PSC rate is the other half. What’s more, a good chunk of the remaining factor is the fixed costs the utility charges each customer, which the customer has no control over, but which are also regulated by the PSC. So clearly the PSC controls more than half of what the customer’s bill is, contrary to the assertions in the letter. Some of the rest is taxes, and those taxes are based on rates as well as consumption, so here again the PSC is an equal contributor. So let’s get the facts straight.

Base rates versus surcharge rates: The PSC is trying to wiggle out of the responsibility on the rates issue by splitting hairs between base rates and surcharges. No customer cares whether his billfold is being emptied by a base rate or a surcharge. Both were approved by the PSC and both take money out of his pocket.

The Public Service Commission says: “Kentucky Power is entitled … to earn a reasonable rate of return …’’ and “Kentucky Power’s rates … are driven by its day-to-day operating expenses and the cost of ownership of its generating facilities …” Tell that to the person who has to choose between heat and food, or the person who has to choose between heat and medicine. The fact is that regulated utilities have it made. They don’t have to be efficient or come up with a less expensive or better product, unlike a company that competes in the open market. In fact, they have no incentive to do either of those because they are guaranteed a return. They have no competition of which I am aware.

The Public Service Commission says: Kentucky Power “ratepayers pay a relative small proportion of” AEP costs. Whatever the proportion, it is still a cost to the people who are getting utility bills. These are people who, by and large, are unemployed or making minimum wage of $7.25 an hour or less and likely haven’t had a pay raise in years. Whatever their share is of a 30 percent increase to executives, they are getting shafted. Why should people who probably haven’t had a pay raise in years pay any part of 30 percent raises for fat-cat executives? The PSC is acting as Robin Hood in reverse: Steal from the poor and give to the rich.”

The Public Service Commission says: “No decision has been made” on Case 2013-00430 “to convert a portion of the Big Sandy plant to run on natural gas.” You think we don’t know that? The reason I brought this up to the Letcher Fiscal Court is because it’s coming, and we need people to know and to have a chance to fight it. My bet is you will rubberstamp it unless opposition becomes so overwhelming you can’t ignore it. And when that happens, you will be charging the very people whose coal jobs have been lost to natural gas conversions for that conversion, effectively requiring them to pay for having their jobs taken away.

I say it takes a lot of gall to defend executive pay increases of 30 percent under any circumstances, but it takes supreme gall to do it in these times. A few years back, it was discovered that executives were being paid 400 times as much as their lowest paid employee, a huge increase in the multiple from the previous couple of decades. The powers that be expressed outrage and vowed to do something about that. They did, all right. Executive pay now averages 1,000 times the pay of their lowest employee. And this from an executive class that nearly brought this county down over the last five years. Does anyone think these guys deserve rewarding for what they are doing to this country and this economy? Do you? You are probably getting the kind of salaries that render your electric bills insignificant, but your job is to consider the citizens of Kentucky. You don’t seem to be doing that.

In fact, the PSC is looking out so well for the shareholders of AEP that AEP’s stock price is close to its all-time high.

Let me give the Public Service Commission and legislators a list of people and places suffering in Letcher County because of your lack of caring and inaction or non-action.

There was a small church in the city of Neon that had services four days in the last billing cycle. They have a small congregation of dedicated people. Most of their congregation is on fixed incomes. They don’t even have a hot water heater in their church, and their $800 power bill for last month has caused a hardship on the small church that asked for no more than to hear the word of God.

There are also the widow women in Jenkins and Whitesburg who are raising their children on $850 a month. How about the laid off coal miner that’s losing his unemployment benefits from Eolia, Colson and Blackey?

Or you might dig a little deeper and find dozens of disabled veterans that have to sit in one room of their house with blankets over their doors, huddled up to a kerosene heater to keep warm.

These people live all over Letcher County. I really don’t believe the members of the Public Service Commission read the January 22 edition of The Mountain Eagle and decided to answer the complaints that myself and others brought up in the fiscal court meeting. I truly don’t believe the members of the PSC care what the people in Letcher County and eastern Kentucky think.

I do know at least one of the legislators reads The Mountain Eagle every week — I guess to see what the public opinion is.

The new bills coming out this week will be much higher than last month. I don’t know what poor people are going to do. May God help us, because the PSC and legislators will not.

WAYNE FLEMING
Magistrate, District Five



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