This article was updated February 21.
Kentucky Power, a utility serving 20 of Kentucky’s poorest counties, sent ripple waves through the region last summer when it filed for another rate increase— its fourth within the past eight years. This would been an 8% to 18% hike for homeowners, renters and small businesses in Eastern Kentucky. However, in mid-January, the Kentucky Public Service Commission (PSC) issued a ruling limiting the increase for residential customers to just 5.7%, pointing to “excessive and disturbing” formal comments filed by members of the public over the past 6 months.
While any rate increase will be painful for many Eastern Kentuckians, the PSC’s ruling for residential customers is worth celebrating. However, we want to call attention to the impact on small businesses and nonprofits in our region who did not get such positive news. General Service customers – like community centers, offices, restaurants, and convenience stores – will experience an energy rate increase of about 10% and a demand charge increase of 26%. Large General Service customers – like grocery stores, schools, and medical clinics – will see their rate go down by 3%, but their demand charge jump by a whopping 58%. Demand is an additional charge for commercial customers based on how much power they use at one time, and can be a significant portion of the bill for larger energy users. On top of this, there will be a 12-14% increase in monthly meter fees as well.
Mountain Association, the nonprofit I work for, helps businesses, nonprofits and local governments in Eastern Kentucky save money on their bills. We have well over 100 clients in Kentucky Power’s service area and we calculated that their average bills will increase 9% to 13%. That’s over $600,000 per year – before taxes and surcharges – in additional electric costs.
While this will be tough on businesses and organizations in our region, there are a couple of other things we want to highlight that will bring positive change for Kentucky Power customers. The PSC approved Kentucky Power’s commitment to extending the amount of time customers have to pay their bills from 15 days after billing to 21 days. The PSC also approved some language for Kentucky Power that will limit when residential customers can be disconnected for non-payment. Kentucky Power also agreed to a two-to-one match of the Residential Energy Assistance charge on residential bills, which will double the funding for this program that helps struggling customers pay their bills.
The Mountain Association, along with Appalachian Citizens’ Law Center, Kentuckians for the Commonwealth, and the Kentucky Solar Energy Society, worked closely with Kentucky Power to discuss rate increases and other issues at length over the past several months. Our group, especially Kentuckians for the Commonwealth and Appalachian Citizens’ Law Center, deserve kudos for their work in getting people to file formal comments in the case, which allowed the PSC to know how these changes would impact Kentuckians.
Our group understands that Eastern Kentuckians need a break on rate increases for the next several years, especially while we are all dealing with record inflation. We believe the frequency of filing for rate increases by Kentucky Power can be prevented through the company’s greater investment in efficiency programs that lower our bills and the amount of energy that they need to purchase to power the region. We look forward to collaborating with Kentucky Power in the weeks and months ahead to develop better energy-saving programs that help their customers lower their electricity needs and bills.
If you are interested in sharing your thoughts on how Kentucky Power can better plan for the coming years, you can currently file a public comment on their Integrated Resource Plan, which outlines their plans for the next 15 years, via Kentuckians for Energy Democracy at k4ed.org/kpc.
