FRANKFORT, Ky. – State Rep. Chris Harris, joined by a bipartisan team of Eastern Kentucky legislators, filed two pieces of legislation Thursday aimed at reducing electrical rates for Eastern Kentucky customers of Kentucky Power.
House Resolution 109 requests the Kentucky Public Service Commission (KPSC) to reconsider its approval of more than $100 million in rate increases and more than $68 million in riders not counted in base rates.
House Bill 455 would expand the PSC’s supervisory control over utility matters as necessary to protect and promote the public interest. The bill also requires the KPSC to rehear utility rate cases in circumstances where an out-of-state public utility fails to approve a multistate transaction or imposes any new conditions that are materially different than those imposed by the Kentucky commission’s order.
“This is a simple case of shifting the burden of doing business onto the backs of some of the poorest and most vulnerable citizens in the America,” Rep. Harris said. “While Kentucky Power’s profits soar, the citizens of our region are left to dig deeper each month under a dizzying array of rate increases and riders. We simply can’t do it.”
The resolution notes that Kentucky Power’s service territory includes some of the poorest counties in the state and the nation, with high levels of poverty and unemployment resulting from the decline of the coal industry in Eastern Kentucky. The job loss has resulted in population decline from migration and a decline birth rate, with a great many of Kentucky Power’s customers living on fixed incomes and government benefits.
Rep. Harris said Kentucky Power sought the least cost alternative to achieve compliance with anticipated EPA regulations and testified to the KPSC that the best option was for Kentucky Power – a regulated subsidiary of American Electric Power (AEP) – was to buy a half interest in the Mitchell generation station owned by AEP Ohio, a deregulated subsidiary. AEP reported to its shareholders that moving the service territory of the Mitchell station from deregulated Ohio to regulated markets in Kentucky and West Virginia would improve corporate profitability.
When the KPSC authorized a rate increase for Kentucky Power customers in 2015, it also included a variety of new surcharges that appear as line items on the ratepayer’s monthly bill. These include the cost of retiring the Big Sandy units at a cost of $16 million a year for 25 years. They also include the cost of environmental compliance at the Mitchell plant which has already been paid for in part by AEP.
“The rate hikes and riders imposed by Kentucky Power have placed enormous financial pressure on far too many of our citizens who are already struggling to make ends meet,” said state Rep. Angie Hatton of Whitesburg, who co-sponsored both HB 109 and HB 455. “These increases cannot be sustained over time and we must do everything in our power to seek relief on behalf of the people we represent.”
The resolution and bill were also co-sponsored by House Democratic Leader Rocky Adkins of Morehead; state Rep. Kevin Sinnette of Ashland; state Rep. Rick Nelson, Middlesboro; state Rep. Chris Fugate of Chavies; state Rep. Tim Couch of Hyden; state Rep. Larry Brown of Prestonsburg; state Rep. John Blanton of Saylersville; and state Rep. Danny Bentley of Russell.
A full description of both bills can be found at www.lrc.ky.gov/record/17rs/ record.htm. Rep. Harris represents the state’s 93rd House District in Pike and Martin counties.