FRANKFORT, Ky. (March. 12, 2025) – Attorney General Russell Coleman and Kentucky Public Service Commission (PSC) Chair Angie Hatton announced today they are filing a complaint against American Electric Power and its subsidiary, Kentucky Power, for unfairly forcing Kentuckians to subsidize utility construction in other states. The complaint was filed before the Federal Energy Regulatory Commission (FERC) in Washington, D.C., seeking to overturn a multistate funding structure that has taken advantage of Kentuckians.
Kentucky Power customers pay the highest average residential rate of any utility in Kentucky. In 2022, the average residential customer paid a shocking $187.56 per month.
As a subsidiary of AEP, Kentucky Power customers contribute to a multistate arrangement that supports utility transmission investments in seven states. The problem is that AEP is not investing and building equally across the states.
Between 2017-2022, Kentucky Power customers subsidized an estimated $66 million of transmission investments in other states, far exceeding the amount that was invested in the Commonwealth. In effect, some of the poorest Kentuckians are being charged millions to pay for utility infrastructure in other states.
“For generations, out-of-state interests have targeted our Mountain counties, leaving behind persistent and painful challenges. American Electric Power and its subsidiary have ignored our calls for change and taken resources out of this region to turn a profit in other states. We refuse to allow this fundamental unfairness to go on any longer,” said Attorney General Coleman. “As Attorney General, it’s my responsibility to promote affordable and reliable power for Kentucky families. Today is a step in holding AEP accountable for taking advantage of Kentucky customers.”
Kentucky Power serves approximately 165,000 customers in Boyd, Breathitt, Carter, Clay, Elliott, Floyd, Greenup, Johnson, Knott, Lawrence, Leslie, Letcher, Lewis, Magoffin, Martin, Morgan, Owsley, Perry, Pike and Rowan counties.
“Kentucky Power is one of the smallest affiliates of AEP and its 20-county service territory encompasses some of the country’s poorest people, yet its ratepayers pay the highest rates of all the AEP affiliates in PJM,” Chair Hatton said. “We are grateful that the Attorney General’s office has joined the Kentucky PSC in this complaint that we hope will resolve our longstanding disagreement with the way American Electric Power allocates transmission costs among its affiliates. Despite the PSC’s numerous efforts to encourage AEP to resolve this issue, we must now resort to filing litigation at FERC to prevent Kentucky Power ratepayers from being overcharged for transmission infrastructure costs from affiliates in other states while never seeing the benefit of adequate transmission infrastructure investment in Kentucky Power territory.”
FERC is an independent agency that regulates the interstate transmission of natural gas, oil and electricity.
Executive Director of the Attorney General’s Office of Rate Intervention John Horne and Deputy Director Michael West filed the complaint on behalf of the Attorney General’s Office.
Read the complaint.