Kentucky Power officially files for rate increase

Kentucky Power has officially filed for a rate increase that could translate to a nearly 15 percent increase for residential customers.

The company officially filed its request with the Kentucky Public Service Commission on Aug. 29. In the application, Kentucky Power lays out its plan for the rate increase, which would translate to a nearly $96 million increase in the company’s annual revenue, bringing its annual total revenue to just over $749 million.

According to the filing, the company contends its current rates are not, “fair, just and reasonable; do not permit the company to operate successfully, to maintain its financial integrity, to attract capital or to compensate its investors for the risks assumed; and do not provide the financial resources required to permit Kentucky Power to continue to provide adequate, efficient and reasonable service throughout its service territory.”

In addition to the 15 percent proposed rate increase for residential customers, Kentucky Power is also asking that the PSC grant it a 13-15 percent rate increase for commercial and residential customers.

“There’s no doubt the cost of providing electricity to homes and businesses has become more expensive across our nation, but especially in Eastern Kentucky,” the company said in an Aug. 26 statement posted to its website. “The loss of population and industry here has created real challenges, pushing costs even higher. When we make decisions about investments, we must balance those investments with keeping costs as low as possible. “

Included in the filing are measures the company proposes to take to “offset customer rate impacts,” including:

• A capital structure that reduces the company’s equity layer which, in turn, reduces the company’s weighted average cost of capital;

• The 10 percent return on equity proposed is the lowest recommended by the expert used by the company;

• The company is not proposing to adjust depreciation rates for the Mitchell Plant, which would reduce immediate bill impacts to customers and allow the company to pursue securitization of the Mitchell Plant investments; and

• The company is proposing to remove storm expense from base rates and be authorized to automatically establish regulatory assets for all storm costs incurred, which would have immediate bill impacts to customers and allow the company to pursue securitization for storm costs.

The Kentucky Power rate case is before the PSC under case number 2025-00257. To issue comments in the case, visit the PSC website at psc.ky.gov/Case/SearchCasesPublicComments.

The PSC record shows that numerous public comments have already been submitted in the case, many before the application was officially filed. Kentucky Attorney General Russell Coleman’s office has been granted intervenor status in the case.

link