Kentucky Power wants to be able to use long-term debt to avoid raising customer rates again in a few years.
The Kentucky Public Service Commission spent three days this week hearing testimony in Kentucky Power’s latest rate case.
The commission’s chair, Angie Hatton, pressed company executives on what they could do to hold customer rates where they are.
Tanner Wolffram, Kentucky Power’s director of regulatory services, told Hatton that lawmakers would need to enable the company to issue bonds to cover future expenses.
This method is called securitization and has been used across the country.
“We're setting ourselves up for the next couple years to potentially avoid filing rate cases,” Wolffram said.
Kentucky Power needs to replace a cooling tower at its Mitchell plant in West Virginia and build new natural gas generation in the next several years. Issuing the bonds could help the company pay for those projects at a lower cost.
“We understand that those, those costs, are coming,” Wolffram said.
The General Assembly previously approved securitization in 2023, and Kentucky Power used it last year to mitigate the impact of a rate increase.
Kentucky Power’s 162,000 customers could have seen a 13% increase last year, but securitization held the increase down to 6%.
“To the extent that we get securitization legislation in this session, my hope would be that we could place bonds by the end of this year, provided the new legislation allows for it,” Wolffram said.
Kentucky Power is currently seeking to raise rates by 8% this year and 9% next year above current rates.
The year three increase would be 12% above current rates, but still below the 15% originally proposed.
The Kentucky PSC held three public comment hearings, in Pikeville, Hazard and Ashland. Residents and local officials told the commission to deny the increase.
Wolffram and Kentucky Power president and CEO Cynthia Wiseman told the commission that stopping the outmigration of residents in eastern Kentucky and attracting new large customers could help bring down electricity rates.
