Customers of Kentucky Power in the state’s eastern region will see a new charge on their energy bills starting next month.
That comes as Kentucky’s Public Service Commission approved its first securitization case for the utility. The process takes certain costs, bundles them together and sells them as bonds to investors. Those bonds are backed by charges on customer bills.
PSC chair Angie Hatton says the case was the first of its kind in Kentucky.
“It has been used in other states successfully to help lower costs on ratepayers for extraordinary expenses, and so this is the first time we've done it in Kentucky since Senate Bill 192 was passed in 2023,” Hatton said.
The PSC approved the process so Kentucky Power could cover the retirement of its Big Sandy Power Plant and costs from major storms.
Hatton says without securitization, customers would be charged even more.
“This process has resulted in not just a delay of these charges, but an overall reduction in what they would have paid had we not had this method in the new legislation that allowed Kentucky Power to sell bonds and securitize this expense,” Hatton said.
The PSC says Kentucky Power customers will see 6.37% increase on their utility bills.
Without securitization, that increase would jump to 13.13%. The PSC estimates it would save Kentucky Power ratepayers around $90 million over the next two decades.
Around 162,000 customers in 20 eastern Kentucky counties will be affected.
Angie Hatton is the chair of the Public Service Commission. She says without securitization, customers would be charged even more.
Those bonds are backed by charges on customer bills. State lawmakers approved that process for utilities in 2023.
