Lawmakers fear KY Power sale to Liberty Utilities will hike rates, cause loss of jobs

According to Liberty Utilities and Kentucky Power Company, the sale of Kentucky Power would decrease customer rates by 14-16%.

FRANKFORT, Ky. (WTVQ) – Last October American Electric Power announced it would sell Kentucky Power to Liberty Utilities for nearly $3 billion.

Both KPC and Liberty Utilities say the rates for customers will not increase because of the sale.

According to Liberty Utilities and Kentucky Power Company, the sale of Kentucky Power would decrease customer rates by 14-16%.

How? Liberty Utilities says through customer benefits, like a 3 year “rate holiday” on the collection of the Big Sandy Plant Decommissioning Rider and the creation of a $40 million fund to help offset fluctuating fuel rates.

But, some state lawmakers within the Mountain Caucus are worried the sale could result in higher rates long-term, poorer service to areas already impacted by high energy costs and a loss in jobs.

“We’re a state that is filled with rich natural resources with people that are trained in these fields that are the best you can find in mining, oil and gas. Their plan, when applied to our model, really pushed us out. How do you put that many new megawatts renewable into a state without displacing coal, oil, gas, which are our big job providers in our region” said Republican Senator, Brandon Smith.

Some lawmakers signed a letter Thursday stating their core values and thoughts on the potential sale.

“We’re going to push back and we want to see a plan come forward with us with a company that understands we’re okay with renewable, but we want to see those renewable, couple with reliable and affordable natural resources, that’s the key to working with the Commonwealth of Kentucky and we didn’t see that with this deal” added Senator Smith.

Governor Andy Beshear however, says he is in favor of the sale…that Kentucky Power itself is not capable of providing affordable rates to its customers.

“Kentucky Power has been in a spiral the past decade, increasing their rates on the people who can least afford it with no real investment in the area and as rates go up, fewer people can pay for it, so then they have fewer dollars coming in so less they raise rates again” said Governor Beshear.

The potential sale has more than 30 letters of support from area agencies, chambers and out of state customers of liberty utilities.

KPC and Liberty Utilities released the following joint statement.

“Liberty has negotiated with AEP to purchase Kentucky Power at a fair purchase price and maintain its current employees and operations in Eastern Kentucky. This transaction represents the best path forward for securing a strong future of reliable and cost-effective electric service, while preserving critical local jobs and creating new ones, all with a view to enhancing customer satisfaction.

 “We appreciate and respect the interest that Attorney General Cameron and the members of the Kentucky Mountain Caucus of the General Assembly have taken in this important process. We have heard their concerns and addressed them in filings made at the Public Service Commission. We want to continue to work with them to help Eastern Kentucky thrive by providing significant benefits for the region including jobs and lower electric bills for Eastern Kentucky residents,” David Swain, President, Liberty South Region

  • If the transaction is approved, Liberty has committed to lowering residential customer bills by 14 to 16 percent, potentially saving Eastern Kentuckians hundreds of dollars a year on their electric bills (depending on their electricity usage).
  • These customer savings will only happen if the purchase is approved. They include a $40 million fund to help offset volatile fuel prices and a three-year “rate holiday” on the collection of the Big Sandy plant decommissioning rider that is currently part of Kentucky Power customer bills.

Liberty has committed to expanding Kentucky Power’s existing operations in the region, including keeping the current team of Kentucky Power employees, adding approximately 100 new jobs and maximizing the life of the Big Sandy Plant.

  • Liberty plans on bringing approximately 100 new, good paying jobs to Eastern Kentucky including a customer advocate, in-person payment locations and local customer care agents to provide enhanced customer service.
  • Liberty continually evaluates the best available power generation sources to serve its customers. We intend to work collaboratively with our customers and the Kentucky Public Service Commission (“PSC”) before any changes are proposed. Ultimately, any changes will require the approval of the PSC.

Liberty’s commitment to Eastern Kentucky and its promise to retain employees, create new jobs and provide lower electricity rates for customers is supported by numerous local officials and business groups who have sent letters supporting the purchase to the PSC.

 More information about the benefits that Liberty expects to bring to the region are available at www.LibertyKentuckyPower.com and in the testimony that Liberty and Kentucky Power filed with the PSC on March 18, 2022.”

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