Rate increase request by Southern Water denied

FRANKFORT, Ky. (WTVQ) – The Kentucky Public Service Commission says it can’t approve a rate increase requested by Southern Water District.

In July 2018, Southern Water District requested to raise rates by about 33%.

But the commission says the Floyd County utility failed to provide accurate records related to its billing and revenue.

Southern Water lost a number of financial records when it switched billing systems and failed to archive the records from the previous system, according to the commission.

The commission states, as a result, Southern Water was only able to provide a single month of unverifiable records that it extrapolated to a full year, making it impossible to accurately determine the utility’s financial situation.

The commission also says Southern Water “demonstrated a lack of candor and a failure to properly provide documentation” and that the utility was unable to explain how it arrived at its estimates and conceded that the amounts provided had not been verified.

Kentucky law requires a utility seeking a rate increase provide at least one full year of financial data.

The commission also noted concerns about Southern Water’s financial and operational management and says it is considering initiating one or more investigations into the utility’s governance and management.