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The Commonwealth

‘How are they going to live?’ Skyrocketing utility bills leave Kentuckians struggling

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A gas bill from a 950 sq ft. house in Covington, KY during the month of January. The new homeowner kept the thermostat at 55 for most of the month while moving into the home.

After Sheena Lyn Larsen opened her utility bill in January, she had to get a second job.

“The most expensive bill that we have seen so far has been $999. Which, to me, was absolutely egregious because we live in an 800 to 900 square foot house, and we have a wood stove,” Larsen said. “We don't even use electric heat.”

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Sheena Larsen's electric bill.

Larsen and her husband live in Hazard. They both serve in the National Guard and returned from a deployment in the Middle East a year and a half ago. Originally from North Carolina, Larsen said she’s noticed that people work hard, but that doesn’t seem to help them get by.

“What I have seen since I've been here is this area is consistently abused for its resources and it's labor,” she said. “And it's still happening today. The only difference is the new coal company is the damn power company.

Larsen is one of dozens of Kentuckians who shared their gas and electric bills with WEKU for this story. A few people said they saw no change in their gas and electric bills. Some reported increases of $50 to $100 dollars. But several others have seen their bills double and even triple.

To cover some of the unexpected expenses, some said they’ve skipped trips to the grocery store while others said they work more or have dipped into savings. Despite making additional sacrifices, some say help is limited and worry that they can’t pay hundreds of extra dollars.

Surging utility bills

Chrissy Floyd lives in Berea. Her electric bill tripled in January.

“Last month it was $146 and this month it jumped to $520. I keep my thermostat at 68,” Floyd said. “We’ve been in the same spot for 13 years and the highest one I’ve ever had is $400 and that’s back a few years ago when it was like zero all month long.”

Floyd said she received her paycheck the day the day before her bill was due, and she was able to pay.

“My main concern is some people live on a fixed income,” she said. “When they’re only getting $700 dollars a month, you know, how are they going to live?”

Mari Amber Melber Shaffer lives in an older house in Berea and covers every window with plastic to keep cold air out. Shaffer’s December and January electric bills were between $500 and $600.

“It is kind of drafty and hard to heat in the winter,” she said. “But the last three winters we have had a light bill of about $250 to $300 a month in winter so that definitely shows that our rate has doubled since last year.”

Experts say there are multiple factors that can affect the price of a utility bill. Thermostat settings, your home’s efficiency and the weather all contribute to energy use.

But an unexpected driver of the spike in energy costs this winter is the “fuel adjustment clause,” a process where utilities are allowed to pass on the cost of more expensive fuel to ratepayers. This cost fluctuates based on the price of fuel utility companies use to supply gas and electricity.

What’s driving up costs

Utilities say there’s nothing they can do about the surging prices because the cost of natural gas and coal, which fuels most of Kentucky’s electrical grid, went way up.

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An electric bill from Knox County.

Nick Comer, a spokesperson for East Kentucky Power Cooperative, said surging utility bills reflect the “actual costs of fuel and purchase power.”

“Neither EKPC nor the local co-op marks that cost up or takes profit on that,” he said. “That's the actual cost of the fuel. And that's something that the Kentucky Public Service Commission, on a routine basis, looks at.”

The Public Service Commission sets the rates for Kentucky’s gas and electric utilities. Earlier this month, the commission’s chairman Kent Chandler told a legislative panel that there’s a two-month lag for the FAC to show up on a bill.

“The higher than ordinary bills we saw for those utilities that were able to generate their own electricity were caused by their own fuel being higher,” Chandler said. “It’s being passed through two months after they experienced those higher-than-ordinary fuel costs.”

And the base rate for power also went up In Kentucky last summer, after the Public Service Commission approved rate increases for East Kentucky Power Cooperative, Louisville Gas & Electric and Kentucky Utilities, Kentucky Power and Columbia Gas.

WEKU requested an interview with the Public Service Commission to ask about how rate increases affect customers’ bills. In an email, a spokesperson said the agency cannot comment on individual rate cases.

Daniel Lowry, a spokesman with Kentucky Utilities also said the fuel adjustment isn’t to blame for skyrocketing energy bills. He says January was cold and people are usually surprised by their bills every winter.

“We’re talking about very small percentages of a customer’s bill with this clause, really a few dollars plus or minus. The real issue, again, would be the weather and energy-use habits that impact the monthly bill,” he said.

Lowry said the FAC charge won’t always increase. Sometimes it can show up as a credit.

“For electricity, the rates haven't changed. That's not why the bills are up,” he said. “And it's not about inflation… It's about energy use.”

Though December was unseasonably warm in Kentucky January was colder than usual across much of the state.

Peter Hille is the president of the Mountain Association, a community development organization in Berea. He says January utility bills are often more expensive than the rest of the year, but this year’s FAC charges have piled on the burden.

“The energy costs used to calculate the fuel adjustment don’t hit the utilities’ billing cycle for two months, so the increased cost on our January bills actually came from a spike in prices last fall,” he said.

With Russia’s invasion of Ukraine and the volatility of energy prices, the Mountain Association advocates for more investment in renewable energy.

When asked if reports of high utility bills across the commonwealth should prompt action from the Public Service Commission, Hille said, “I do think the Public Service Commission should look at it.”

Treating utilities as a human right

The NAACP advocates for treating access to utility services as a human right. In its report Lights Out in the Cold, the organization documented consumer deaths after power shut offs, and said utilities need to reform the system by factoring in people’s needs and safety. The NAACP points out that when people lose power, they can’t use medical equipment like oxygen. Extreme hot and cold temperatures can lead to hypothermia and heat stroke also causing deaths.

Chris Woolery with Mountain Association, in Berea, says officials need to make the utility system work for the people it serves.

“With pandemic deaths still at or near all-time highs, and the lack of consumer protections that have lapsed in most states, when it comes to energy bills and shut offs, it’s a really tough time to be facing those extra charges,” Woolery said.

Woolery says utility policies and investments should be equitable, more affordable and inclusive. Investments in renewable energy is one way consumers can benefit, he said. Especially since Kentucky produces much of its power from coal.

“Make our systems more resilient with local distributed energy resources, rooftop solar, and local backup and battery storage,” Woolery said. “And put energy under the local control and ownership of the people who know what they need in their own communities, rather than making more big, huge power plants that have to transmit energy over huge distances.”

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A utility bill from Louisville, KY.

Rep. Angie Hatton, a Democrat representing Letcher County and parts of Pike County, said during a recent press conference high electric and gas bills are one of the biggest issues in her district right now.

“Power bills and electric rates in particular in Eastern Kentucky are very often higher than rent for folks in my district. My grandmother got a $900 utility bill — that's not unusual,” Hatton said.

On Monday, Gov. Andy Beshear said he’s concerned about the reports.

“Yeah, I'm concerned about the price of utility bills, especially in eastern Kentucky. And so yes, actively looking at that,” Beshear said.

How to find help

So what should you do if you are already behind on your utility bills? If you can prove COVID hardship, the Kentucky Eviction Relief Fund and the Kentucky Homeowners Assistance Fund can pay for past due utilities.

Gov. Beshear spoke about the programs during a press conference in February.

“We have one for renters, and now one for homeowners that come through Coronavirus aid from the federal government,” Beshear said. “They are aimed at keeping everyone in their homes.”

Daniel Lowry with Kentucky Utilities says if you are struggling to pay, financial help is available through the KU Winter Care program. Lowry says contacting KU directly is the best way to find out your options.

“KU wants to be able to make sure folks get the help they need and keep their lights on and their heat on,” Lowry said.

Community Action Councils can also help. The Low-Income Home Energy Assistance Program (LIHEAP) and the Low Income Home Water Assistance Program offer financial help for people who meet up to 150% of the federal poverty guidelines. Applications for the LIHEAP program close March 31, 2021 or until funds run out. If you think you don’t qualify, community action councils urge people to reach out regardless because there may be other resources available.

Lastly, the Public Service Commission investigates complaints about utilities on its website.

In the meantime, Sheena Larsen from Hazard says the community deserves to know why prices have skyrocketed.

“There are people here on fixed incomes. There are people here that are working 40, 50, 60 sometimes more hours a week just trying to make it,” Larsen said. “And again those people deserve answers and they deserve better than what they're getting. That’s it.”

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