PSC approves rates for Kentucky Power customers

Following a three-year freeze on base rates for Kentucky Power customers, the Kentucky Public Service Commission (PSC) last week issued an order setting new rates effective Jan. 14.

To lessen the rate impact for customers, the PSC accelerated distribution of the excess unprotected accumulated deferred income tax (ADIT) resulting from the federal 2017 Tax Cut and Jobs Act. The action will create a credit on customer bills helping to offset new rates.

The credit will now appear over three years, rather than 18 years as previously established, and will be larger than credits previously issued, which benefits customers, the company said.

For example, a residential customer using 1,100 kwh per month will receive a bill credit during winter months of approximately $24.05. As a result, the average monthly winter residential bill will actually decrease to $114.50, a reduction of 4.54 percent.

In non-winter months, for a residential customer with an average monthly usage of 1,100 kWh, the average bill will increase $18.59, or 15.46 percent, from $120.26 to $138.85.

The bill credit structure helps ensure customers receive maximum benefit during months where electrical usage is highest, according to Kentucky Power officials.

“Our rate case proposal was designed to be sensitive to customers who may be struggling during the pandemic,” Kentucky Power President and CEO Brett Mattison said. “It’s no secret the downturn in the economy is affecting everyone, including the financial health of Kentucky Power. In order to continue providing safe and reliable power to eastern Kentucky, rate increases are necessary from time to time. We always strive in a rate case to have as little impact on customers as possible,” Kentucky Power president and chief operating officer, Brett Mattison said.