The state’s Public Service Commission has launched an audit of Kentucky Power’s management and operations.
The audit comes after the PSC approved a Kentucky Power rate increase in February while citing “troubling practices and behaviors” at the company.
The utility has about 162,000 customers in 20 Eastern Kentucky counties. Those residents pay some of the highest electricity bills in the region.
On July 8, the PSC will hear a related case involving Kentucky Power’s Mitchell coal plant in West Virginia.
The plant is jointly owned with Wheeling Power. The companies have asked state regulators in Kentucky and West Virginia to approve a $191 million cooling tower replacement project.
Electricity customers in both states will pay for the project, if it’s approved. The companies received a $51 million federal grant to offset the cost, easing the burden slightly for customers.
The 55-year-old Mitchell coal plant has been a source of friction between Kentucky Power and the state PSC and attorney general’s office for several years.
The audit may look at decisions involving Mitchell, which was acquired more than a decade ago to replace coal generation at the Big Sandy plant in Lawrence County.
In December, the PSC approved Kentucky Power’s 50% ownership of Mitchell to continue beyond 2028. In 2021, a different slate of commissioners rejected a similar plan.
Kentucky Power’s parent company, American Electric Power, subsequently attempted to sell Kentucky Power, but federal regulators denied the transaction.
Sarah Lynch, a Kentucky Power spokeswoman, said the company will "fully cooperate" with the audit and the selected consultant.
"We serve one of the most challenging electric service territories in Kentucky, and our employees work every day to safely deliver reliable electric service across eastern Kentucky," she said. "We are always looking for ways to strengthen our operations and improve the experience we provide our customers, and we believe this process provides another opportunity to do that."
