Comment: Why we intervened in Kentucky Power’s 3rd rate hike in 5 years
Last fall, amid a pandemic that saw many East Kentucky residents face even more dire financial situations, Kentucky Power filed a new tariff proposal package in Frankfurt that proposed tariffs. electricity for more than 165,000 customers in 20 counties; and significant changes to net solar metering rates.
Kentucky Power has called for a 25% rate hike – its third hike in five years – and also included disincentives for much-needed energy efficiency upgrades that would save home and business owners money. companies.
That is why the Mountain Association, Kentuckians For The Commonwealth (KFTC) and the Kentucky Solar Energy Society, represented by Tom FitzGerald with the Kentucky Resources Council, jointly intervened in the case through formal proceedings. We have sought to participate so that we can advocate for reasonable tariffs and fair solar net metering policies.
Each year, the Public Service Commission receives approximately 500 requests from utility companies for rate and service changes. Almost 85% of these cases are not contested. Our status as “co-interveners” has allowed us to provide testimony and cross-examine witnesses to further examine the rate hike proposed by Kentucky Power. Together we publicized the case. More than 250 public comments were posted on the KFTC website. We encouraged virtual opportunities for public hearings so that customers could comment safely during COVID-19, and eventually three such hearings were held.
In January, the PSC issued an order denying approval of the rate increases proposed by Kentucky Power. The PSC reduced the rate increase requested by Kentucky Power from $ 70 million to $ 52 million. Ultimately, that means residential rates will still go up 12.5% and small business rates will go up 12%, but less than if Kentucky Power had prevailed.
The PSC has agreed with us that the company’s plan to spend tens of millions of dollars on new advanced meters and its proposal to recover those costs should be rejected, sparing customers additional fees to pay for these upgrades. They also rejected Kentucky Power’s plan to charge lower rates to their biggest energy consumers. We argued that this “declining overall rate” would discourage investment in energy efficiency. There are much better ways to help customers with high winter bills, including Pay As You Save As You Save programs that will lower bills and improve people’s homes at the same time. .
The board disagreed with us that the fixed meter fees should not be increased and approved the company’s request to increase the monthly fees paid by all residential and small business customers. , regardless of their energy consumption. We opposed this proposal because it discourages people from investing in efficiency, makes it harder for customers to manage their bills while saving energy, and because the impact is felt harder by customers. low income and fixed income.
The PSC has deferred a decision on changes to Kentucky Power’s net metered solar power tariffs. The utility had proposed to reduce by 75% the credit granted to solar customers. The Commission criticized the utility for failing to provide a cost of service study to justify its new rates and for rejecting its attempt to base the rates on its “avoided costs”. Had the PSC approved the proposed solar net metering changes, it could have set a bad precedent for all other Kentucky electric utilities. Instead, the commission said it would rely on the advice of a consultant and held a new hearing to gather additional evidence to determine what is the fair value of the electricity fed into the grid by solar net metering customers.
In the meantime, the PSC order allowed Kentucky Power to implement the proposed net solar metering tariff, subject to having to reimburse customers if the proposed lower tariff is not finally approved at the time of their deferred decision. in May. Unfortunately, Kentucky Power’s decision to apply the tariffs prior to the deal closing has created unnecessary confusion for customers considering solar power.
The Mountain Association, KFTC, Kentucky Solar Energy Society and Metropolitan Housing Coalition are now involved in rate cases filed by Louisville G&E and Kentucky Utilities. These cases also include significant changes to net metering policies for solar customers. Public comments, while accepted at any time, are suggested to be sent by the hearing, which has not been scheduled but is expected to take place in April 2021 or later.
To file public comments on this rate case, include the case number (2020-00349 KU or 2020-00350 LG&E) in the subject line of your email to the Public Information Officer at psc. [email protected] and provide your full name and place of residence in the body of the email; or mail to the Civil Service Commission, 211 Sower Boulevard, Post Office Box 615, Frankfort, KY 40602.
The PSC has an obligation to establish fair, just and reasonable rates for all taxpayers. Our organizations intend to help the PSC hold public services accountable to these standards and to taxpayers.