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Ky. bill proposes review of rate increases in economically troubled areas

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Ky. bill proposes review of rate increases in economically troubled areas

Eastern Kentucky lawmakers are floating a plan to let state utility regulators revisit electricity rate increases in counties facing economic hardship.

Introduced on Feb. 14, Senate Bill 147 calls for the state Public Service Commission to determine whether current approved electric rates and charges are "fair, just, reasonable, and in the public interest" for customers in counties with high unemployment and low household income. The bill gives regulators 30 days from its effective date to open a case to reconsider previous orders and make such a determination. The bill also caps the rate of return on investment at 6% in service territories with "economically distressed" counties.

Release of the bill comes about a month after the commission wrapped up Kentucky Power Co.'s rate case. The primary sponsors of the bill, state Sens. Ray Jones II and Brandon Smith, are from communities in Kentucky Power's service territory.

In its Jan. 18 order, the commission granted Kentucky Power an increase in revenue from base rates of $12.35 million, or $19.45 million less than an amount agreed to in a settlement between the company and other parties. The commission also reduced the authorized return on investment for shareholders from the 9.75% in the settlement to 9.70%.

Kentucky Power spokeswoman Allison Barker defended the rate decision and highlighted ways in which the American Electric Power Co. Inc. subsidiary is helping the area.

"The commission examined every aspect of our business over many months and issued an order authorizing new rates that are fair, just and reasonable and provided more assistance to customers in most need," she said.

Barker said shareholders are contributing $600,000 a year to this effort.

She said Kentucky Power is committed to eastern Kentucky and bringing long-term solutions to economic challenges with development that brings in jobs and helps communities grow. The company's investment and focus on economic development produced a "historic 2017" for eastern Kentucky, she said, adding that Kentucky Power's efforts helped announce more than 2,500 jobs and injected nearly $1.8 billion of investment into the region.

Jones, a Democrat from Pikeville, Ky., is the bill's main sponsor. On his Facebook page, Jones said the bill will help reduce electricity bills in eastern Kentucky and encouraged constituents to ask other state lawmakers to support the proposal.

Smith, a Republican from Hazard, Ky., signed on as the bill's co-sponsor. In a press release, Smith said "continual rate increases" are making it hard for eastern Kentucky ratepayers to manage their monthly budgets.

"The hikes on these people who have suffered enough is simply unacceptable," Smith said.

The proposal also lets ratepayers ask the commission for rehearing of a rate increase within six months of the rate hike showing up on a bill. Any petition for rehearing needs 1,000 signatures from a utility's residential ratepayers, the Senate bill said.

The bill then gives the commission 60 days to hold a public hearing and decide within 60 days of the hearing to reduce the rate or affirm its earlier decision. Ratepayers can appeal the original commission decision to the Franklin Circuit Court after the petition for rehearing is decided, the bill said.

The commission does not comment on bills until it has been asked to do so before the legislature, spokesman Andrew Melnykovych said.