Groups that advocate for low-income Kentuckians and the environment would be largely barred from participating in cases over rising electricity costs and others put in front of the state’s utility regulators under newly filed Republican legislation.
Senate Bill 8 would change the makeup of the Kentucky Public Service Commission and limit when independent groups can intervene on behalf of residential consumers, naming the attorney general their “sole advocate” when he chooses to step in. GOP Sen. Brandon Smith of Hazard filed the bill Monday, just ahead of the Senate’s filing deadline. It is set to move through a committee vote on Wednesday morning.
Smith said he hopes the bill would ease some of the enormous pressure eastern Kentuckians feel from rising electricity bills. He said the PSC needs more commissioners and should appear less political.
“I've always had issues with them being under the governor — and any governor,” Smith said. “I'd like to remove at least the appearance of maybe politics being involved. So we are looking at moving it under the state auditor, which is usually very non-political.”
Several advocacy groups spoke with Kentucky Public Radio, sharing concerns over the bill’s limitations on who can intervene on behalf of ratepayers. They fear residential customers, especially low-income ones, would go without adequate representation.
Currently, the Public Service Commission consists of three members, all appointed by the governor and confirmed by the Senate. Under SB 8, three members would still be governor-appointed, but the bill would add two more members to the commission who would be appointed by the state auditor. Gov. Andy Beshear and his lieutenant governor are the only Democrats elected to statewide office in Kentucky.
The Public Service Commission regulates more than 1,100 utilities across the state with final say over how much people pay for electricity, water and sewer, phone and other bills. Its mission is to ensure safe and reliable service at prices that are reasonable for customers while also providing financial stability for the utilities themselves.
The PSC also oversees the construction and operation of utility facilities. That part of its job has come under frequent scrutiny by the General Assembly, which has passed laws creating new hurdles to justify closing coal-fired power plants. A bill very similar to SB 8 was filed last year by Senate President Robert Stivers of Manchester but failed to progress.
Smith said SB 8 would be on an expedited track this time around. He said it’s imperative to reconfigure the commission to address surging energy prices.
“We're not targeting them. We're trying to actually help them achieve a goal, and put the smartest people we can put over there for that,” Smith said. “Energy is everything for us. I mean, if we had cheap power in Eastern Kentucky, our industrial parks would be full.”
The bill would also require that no more than three commissioners have the same political party and, when only three of the expanded five-person board are assigned to decide a case, it must also have representation from both political parties.
It would be removed from the Energy and Environment Cabinet and attached to the auditor’s office instead. Current members of the PSC would be allowed to serve out the rest of their term — unless they don’t meet the expertise requirements of the bill. Then the governor would have to immediately replace them.
The Public Service Commission declined to comment at this time. Scottie Ellis, a spokesperson for Beshear, characterized the bill as “another partisan move” to shift authority away from Beshear and toward Republican officeholders.
“The bill’s provisions likely violate the Kentucky Constitution and will result in less representation and transparency for Kentucky families that are worried about their power bills,” Ellis said in a statement.
GOP Auditor Allison Ball said in a statement that she will do everything in her power to lower energy costs for Kentucky. She pointed to a recent PSC case in which the commission allowed Kentucky Power to institute a 6% rate increase this year, over Attorney General Russell Coleman's objection. Coleman had asked the commission to deny any increase and to subject Kentucky Power to an independent audit; the PSC only adopted the latter of the two requests.
"Kentucky has the resources, people, and support from the federal government to make energy costs affordable again,” Ball said. “I will do everything in my power to deliver those results for Kentuckians."
Kentucky Power had initially requested a more than 14% rate increase.
Limitations on intervenors
Another portion of SB 8 would limit the ability of advocates to intervene on behalf of Kentucky ratepayers. Intervenors would have to prove they have a “special and unique interest” in the issues at hand. And any group hoping to intervene on behalf of residential ratepayers wouldn’t be able to do so if the state’s attorney general had already stepped in.
Several groups frequently intervene on behalf of customers, including the Kentucky Resource Council, the Sierra Club and the Metropolitan Housing Coalition. Audrey Ernstberger, an attorney with the council, said the bill is a “calculated effort to silence independent advocacy” for residential customers.
“At a time when utility rates are rising, residential customers deserve dedicated, conflict-free representation in proceedings that directly determine their bills and financial stability,” Ernstberger said. “Stripping residential ratepayers of independent representation while other customer classes retain multiple, well-resourced advocates is indefensible.”
Since the prohibition only applies to residential customers, it doesn’t appear to preclude manufacturers or other business customers from intervening regardless of the attorney general’s presence.
When asked about this portion of the bill, Smith said he would go into more detail in committee and declined to say more.
Tony Curtis, executive director of the Metropolitan Housing Coalition, said that he’s found in numerous cases his organization, alongside others in the form of the Joint Intervenors, are needed to represent low-income and fixed-income households.
“There [are] socioeconomic questions that are not addressed by the Attorney General's office, as an example, or by the utilities, because it comes down to the affordability question,” Curtis said. “Affordability means different things to different people, and it has the greatest impact and potential for detrimental impact on low and fixed income families.”
According to Sierra Club Kentucky Chapter Director Julia Finch, the PSC would hear from fewer experts and fewer stakeholders should SB 8 pass.
“Being party to a case before the PSC gives real people real power to hold utilities accountable,” Finch said in a statement. “We need to be able to submit testimony, ask questions, review documents, and challenge decisions and without that status, most individual Kentuckians would be left only to send in written comments.”
