PSC Issues Order in East Kentucky Power Cooperative Rate Case

Published 4:05 pm Friday, October 1, 2021

FRANKFORT—The Kentucky Public Service Commission (PSC/Commission) issued an Order today in the rate case proceeding of East Kentucky Power Cooperative Inc. (EKPC). Today’s Order, among other provisions, authorizes a revenue increase of $36.35 million, which is less than the revenue increase in EKPC’s application and less than the amount contained in a Stipulation.

In its April 1, 2021, application, EKPC sought an adjustment in rates to achieve an increase in annual revenues of $43 million, which would equate to a 5.2% increase in wholesale base rates. On July 29, 2021, EKPC and intervening parties filed a Stipulation in which the parties agreed on all issues, including an adjusted revenue requirement $38.3 million. Intervenors are the Attorney General, Nucor Steel Gallatin, LLC, and AppHarvest Morehead Farm, LLC.

The Commission conducted information sessions and public meetings to take public comments on July 27 and 28, 2021. Due to COVID-19, the information sessions/public meetings were conducted virtually. The Commission conducted a formal evidentiary hearing for the purposes of cross-examination and for consideration of the stipulation on August 3 and 4, 2021.

EKPC generates and transmits power to its 16 owner-member distribution cooperatives, which serve more than 540,000 residential, commercial, and industrial customers in 87 Kentucky counties. Each of the 16 distribution cooperatives filed applications for pass-through of EKPC’s wholesale rate adjustment. The approved $36.35 million annual revenue increase results in a 4.4% increase in wholesale base rate increase. For residential customers, the average monthly bill increase will range from about $3.32 to about $4.40, depending on the distribution cooperative.

Utilities’ rates are based on the costs of serving their customers, and for non-profit utilities such as EKPC, rates that are adequate to meet lender requirements and maintain financial stability. EKPC’s last rate adjustment was in 2011 (Case No. 2010-00167).

In addition to approval of miscellaneous tariff changes and authorization to amortize certain regulatory assets, other provisions of today’s Order include the following:

  • The Commission grants EKPC relief from several reporting requirements that the Commission agrees are no longer necessary. EKPC is to continue reporting on its membership in PJM and matters related to Bluegrass Station. In its annual reports on PJM membership, the Commission directs EKPC to include a description of how the benefits and costs of PJM membership compare to if EKPC were not a member to ensure EKPC and its owner-members are receiving net benefits.
  • EKPC is to continue evaluating appropriate demand side management (DSM) programs that will minimize the need for more expensive supply side resources. EKPC’s current DSM programs include weatherization assistance, energy efficiency incentives, and rebates for certain energy-efficient products and equipment. The cost recovery for these programs is through base rates.

Today’s Order (Case No.2021-00103), the EKPC application, the pass-through rate applications and the Orders (Case Nos. 2021-00104 through 2021-00119) for the distribution cooperatives, and related documents are available on the PSC website, psc.ky.gov. (A list of cooperatives and estimated rate impacts is provided in the attached news release.)

The PSC is an independent agency attached for administrative purposes to the Energy and Environment Cabinet. It regulates more than 1,100 gas, water, sewer, electric and telecommunication utilities operating in Kentucky.