Kentucky Power has offered a settlement to state regulators for its rate increase proposal, according to a series of filings Friday.
Kentucky Power proposed a rate increase of about 15% to the Kentucky Public Service Commission to take effect this year.
After hearing public pushback in three hearings in its service territory, it has proposed a smaller increase of 12%. The company will use deferred tax liabilities to reduce the increase further for two years.
With the tax deferrals, customers would see an 8% increase over current rates this year and a 9% increase next year.
In a statement, Kentucky Power spokeswoman Sarah Lynch said the company is “committed to balancing affordability with the investments needed to keep power reliable for eastern Kentucky.”
The Kentucky commission is supposed to hear the evidence in the case this week, starting Tuesday.
In one of its Friday filings, Kentucky Power asked the three-member commission to recess the hearing after public comments Tuesday to allow them more time to consider the settlement.
Kentucky Power asked the commission to approve its settlement agreement by March 1.
On Dec. 30, the PSC approved Kentucky Power’s application to continue its 50% ownership of the Mitchell coal plant in West Virginia beyond 2028. The commission denied that request in 2021. Electricity customers will pay, on average, $2.33 more each month for those costs.
The company has said it will need to replace one of Mitchell’s concrete cooling towers in the next few years. It has not disclosed the estimated cost, citing confidentiality. It will need to seek approval from the PSC in Kentucky and West Virginia to recover the cost from customers.
On Thursday evening in Ashland, about 150 people gathered at the Ashland Transportation Center, a converted railroad freight station, to listen to residents and local officials testify to the PSC commissioners.
Many residents testified of the hardship their electricity bills have created for their families.
Local officials, including Louisa Mayor Harold Sloan, asked the commission to consider what would happen to water and sewer rates if the increase were approved.
He said the small city spends $40,000 a month on electricity for its water and sewer pumps. The rate increase would cause that to go up $6,000 a month, or $72,000 a year, Sloan said. Those additional costs would be passed on to residents who also would pay more for their electricity.
“That's my concern with this tonight. What this will do to the water and sewer rates for our same customers, the same people that are here, can't afford this,” he said. “That means our residents are hit twice, first through the increased electric bills, and then again through the increased water and wastewater rates.”
Louisa, with about 2,700 residents, is about 30 miles south of Ashland, where Kentucky Power is headquartered.
Until 2015, Kentucky Power generated electricity from coal at the Big Sandy plant in Louisa. That year, it shut down one of the plant’s two units and converted the other one to natural gas. It also purchased its 50% share in the Mitchell plant at the same time.
Adam Rice, a representative from the office of U.S. Rep. Hal Rogers spoke after Sloan. As in other public hearings on the matter, Rice blamed the Obama administration’s “war on coal” for the Big Sandy retirement.
