Hearing underway on Kentucky Power’s rate hike request
FRANKFORT, Ky. (WTVQ) – The Kentucky Public Service Commission (PSC) began a multi-day hearing Wednesday on Kentucky Power’s request to adjust its base rates.
In June, Kentucky Power filed a rate review request with the PSC seeking to recover $69.6 million from customers. A settlement reached last month and presented to the Commission for consideration lowered that request by $28.6 million to an overall increase of $34.7 million.
Under the settlement agreement, the residential customer rate would go up approximately 9-percent. Commercial and industrial customer rates would increase 3-to-7 percent.
This week’s hearing is for Kentucky Power’s request to ask questions and gather additional testimony before the PSC issues its ruling. Commission members can approve, modify or reject the settlement agreement. If approved, new rates would go into effect in mid-January.
Kentucky Power says it needs the rate increase for a chance to earn a return on equity of 9.75 percent, which the company considers a vital component to attract investment. The company says the rate hike would provide a mechanism for it to recover 80-percent of its mandatory federal transmission expenses.
Kentucky Power had indicated that it would have to file another case immediately if the federal transmission costs were not accounted for in this case.
The hearing is scheduled to continue on Thursday.
Ashland-based Kentucky Power provides service to approximately 168,000 customers in 20 eastern Kentucky counties.