February 18, 2018
Legislation aimed at cutting electric rates
Appalachian News-Express
Sen. Ray S. Jones II has filed legislation that seeks to offer relief from high electricity rates in economically distressed counties.
If approved, according to a statement issued Wednesday, Senate Bill 147 would require the Public Service Commission (PSC) to reconsider previous electricity rate increases in economically-distressed counties and consider whether future increases would have an adverse economic impact on the citizens of those counties. In cases involving retail electric suppliers that have economically-distressed counties in their service territory, the bill states “the assumed rate of return on investment shall be no more than 6 percent.” The most recent PSC decision allowed Kentucky Power to recover a 9.7 percent return on investment while the national average rate of return for electricity utility is 10 percent.
Under this legislation, PSC would have the authority to modify, repeal, or replace rates and charges that do not meet established criteria.
“The economic downturn and financial hardship of the past 10 years has had a significant impact on the people of Eastern Kentucky.” said Jones. “We have some of the most poverty-stricken counties in the nation. I live in one of the areas that has been devastated by the loss of coal mining and mining-related jobs. We have a lot of struggling families who are trying their best, but jobs — good jobs — are scarce. Many families are paying a disproportionate percentage of their income for basic utility services.”
Jones said he is in daily conversations with people who don’t know what to do about their expenses.
“Every day I hear from people who say to me, ‘Ray, I don’t know how much longer I can pay these electric bills,’” Jones said. “It is not uncommon to have ratepayers with power bills in excess of $1,000 — and many of them are on fixed incomes. We have to help these folks.”
Sen. Brandon Smith, R-Hazard, cosponsor of the bill, said he shares the same concerns as Jones.
“Ratepayers in Eastern Kentucky are struggling to manage their budgets on a monthly basis with the continual rate increases,” Smith said. “The hikes on these people who have suffered enough simply is unacceptable.”
The bill further states that, within six months of when a rate increase appears on the bill, ratepayers may file a petition with the PSC for a rehearing of the rate increase approval. Within 60 days of receiving a petition with 1,000 signatures, according to the proposed bill, the PSC would hold a public hearing and review the evidence supporting and opposing the increase. Testimony from ratepayers would be heard during this hearing, according to the bill.
Based on the bill, the PSC would render a decision about the rate within 60 days of the hearing. After the rehearing, ratepayers may appeal the original commission decision to the Franklin Circuit Court.
This bill proposed by Jones and Smith comes just after the PSC’s ruling regarding Kentucky Power’s rates; the ultimate result of which was a 4 percent decrease in residential customer bills. However, Kentucky Power has requested a rehearing.
Kentucky Attorney General Andy Beshear responded to Kentucky Power’s request for a rehearing, calling the PSC’s decision “merited and well-received.”
“The Attorney General applauds the commission’s actions in ultimately reducing monthly bills for (Kentucky Power) residential customers,” the response said. “The commission’s actions acknowledge an undeniable truth: (Kentucky Power)’s rates are unaffordable.”
According to Beshear, the public comments in the record for the case showed an obvious need for “desperate” customers who could not afford their electric bills.
“For that reason, the Attorney General opposes any argument to change the reasoned and balanced final order of Jan. 8, 2018, in any manner that would prevent the implementation of the 4 percent on-average reduction for residential customers,” Beshear’s response said.
Beshear’s response sited tax issues, clarification issues, financing issues and tariff change proposals as some of the reasons for not supporting a rehearing of the case.
