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Beshear Vows to Fight AEP/Kentucky Power Rate Proposal

PIKEVILLE, Ky. (Oct. 4, 2017) – Attorney General Andy Beshear today joined Eastern Kentucky lawmakers, school and local officials, and advocates to announce his Office of Rate Intervention is recommending that the Public Service Commission (PSC) deny AEP/Kentucky Power’s more than $60 million proposed increase.

The 16-percent increase, Beshear and the group said, would further devastate the more than 168,500 Kentuckians in the utility’s 20-county service area, which includes Boyd, Breathitt, Carter, Clay, Elliott, Floyd, Greenup, Johnson, Knott, Lawrence, Leslie, Letcher, Lewis, Magoffin, Martin, Morgan, Owsley, Perry, Pike and Rowan counties. 

Beshear is proposing that AEP forgo the requested increase on ratepayers by implementing stronger controls on spending and by decreasing the amount returned to its shareholders.

“Our families in Eastern Kentucky are already past the breaking point. They simply cannot afford another increase,” Beshear said. “This company must manage its needs without placing them on the backs of households, business, seniors, schools and local governments.”

Beshear said a crippling rate increase by the company now would counter any economic development efforts in the region by pushing out the skilled workforce needed to maintain existing businesses or attract new businesses. 

Beshear’s proposal filed with the PSC incorporates testimony by four experts on affordability, rate of return required by shareholders and the effect on low-income customers.  

Parties in this case include the Kentucky School Board Association, the Kentucky Cable Telecommunications Association, Kentucky League of Cities, Kentucky Commercial Utility Customers, Kentucky Industrial Utility Customers and Walmart. 

The PSC has scheduled three public meetings: Prestonsburg Nov. 2; Hazard Nov. 6 and Ashland Nov. 8, where the public may attend and provide comments.

Beshear and the group said the PSC should be required, however, to hold public hearings in each of the 20 counties and hear concerns on its proposed increase, which they all agree is unwarranted.

“It’s nothing to hear an $800 or $1,000 electric bill each month,” said Alice Craft, a retired Letcher County teacher. “AEP is asking for another raise. How on God’s green Earth do you expect citizens to pay for this when they can’t even pay for the last increase? We need help from Attorney General Beshear. We need to stop AEP and the rate increases. We can’t afford it.”

“It’s unacceptable to not have a public hearing in Pike County,” said Rep. Angie Hatton, of Whitesburg. “AEP provides electricity to more than 33,000 customers in Pike County, making it by far the largest county in the service area. I demand the PSC hold a public hearing in Pikeville before the case begins Dec. 6. These rates are already so high that they can’t be borne by most Eastern Kentucky customers. To grant any increase at all would ensure that low-income customers will be forced to choose between heat and food this winter.”

“Kentucky Power is attempting to bolster its bottom line on the backs of consumers who are already reeling from the effects of the collapse of our region’s coal economy,” said Knott County Judge-Executive Zach Weinberg. “Instead of accepting a lesser return during these hard times, it is seeking to pass its costs on to those who can afford it least, the men and women and children of Eastern Kentucky.”

“If you live on a low income, or a fixed income, or live paycheck to paycheck, every penny matters,” said Roger McCann, executive director of Community Action Kentucky. “If the cost of one thing goes up, that means you have less to spend on things like food, medicine, books and gasoline. Something has to be cut and that is why I am here today. To speak up for the families who are going to have to make yet another tough decision.”

“Last year Letcher County School System spent $953,677 on electricity,” said Letcher County Public Schools Superintendent Tony Sergent. “A 16-percent increase would cost our district $152,588 annually. With all of the other cuts to our county, like the lowering of the unmined coal assessment, it is easy to see that our school district and others in Eastern Kentucky can’t take another hit.”

“Pike County schools cannot afford to spend additional money on an electricity rate hike,” said Pike County Public Schools Superintendent Reed Adkins. “We are experiencing increases at every corner, like how the free and reduced lunch rates have increased in Pike County, and our families cannot afford one more.” 

“We in Eastern Kentucky are doing everything possible to increase education levels, improve health, establish a strong workforce and attract new businesses,” said James Michael Howell, executive director of the Big Sandy Area Community Action Program. “But we cannot move forward if we are continually being cut off at the knees. This rate increase would do just that.”

To request a public hearing in your county, or to submit a public comment, contact the Public Service Commission at psc.info@ky.gov or at 502-564-3940.

Beshear’s Office of Rate Intervention serves as a watchdog for consumers in matters relating to health insurance, natural gas, water, sewer, electric and telephone rates. Under Kentucky law, the office is responsible for representing the interests of Kentucky consumers before governmental ratemaking agencies, concentrating on utility cases before PSC.

In April, Beshear’s office entered into a settlement with LG&E and KU saving Kentucky ratepayers $90 million.

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