PSC limits utility rate increase, protects rooftop solar – for now

Last summer and fall, KFTC members and our allies fought back hard when Kentucky Power – a monopoly utility serving more than 100,000 households in eastern Kentucky – proposed to sharply raise rates in the middle of a pandemic and to restructure its rates in complex ways that were deeply harmful to ratepayers and the future of clean and efficient energy in Kentucky. 

Yesterday, the Kentucky Public Service Commission agreed with us on many important issues. The PSC’s final order doesn’t deliver everything we wanted, but it’s very good news for struggling households and businesses and for the future of rooftop solar in Kentucky. 

Here’s what your efforts helped to win:

• The PSC reduced the total increase sought by Kentucky Power by nearly 26 percent, from $70 million to $52 million. 

• The PSC denied the company’s plan to spend tens of millions of dollars on new, advanced meters and their proposal to recover those costs, sparing customers from additional charges to pay for those upgrades.

• The PSC rejected Kentucky Power’s plan to charge lower rates to their highest energy users. KFTC and our allies had pointed out that this approach, called a “declining block rate,” discourages investments in energy efficiency and punishes households who attempt to manage their energy bills by conserving energy. 

• The PSC also deferred – for now – the utility’s claim that rooftop solar customers should get only a very low credit on their bills for the energy their renewable energy systems provide to the grid. If the PSC had accepted Kentucky Power’s proposal for crediting solar net-metering customers, it could have set a precedent for all other utilities in Kentucky. Instead, the Commission said it will rely on the advice of a consultant and require more data before determining a fair value for solar net-metering customers.

Unfortunately, the Commission approved the company’s request to increase the monthly fixed charge that all residential customers pay, regardless of how much energy they use. KFTC members and allies had opposed this proposal, arguing that bill increases should be reflected in the per-kilowatt-hour energy charge, not the flat base fee. A higher base fee means the utility makes money no matter how little energy customers use, which discourages people from investing in efficiency and makes it harder for customers to manage their bills by conserving energy.  

The PSC’s ruling about Kentucky Power’s treatment of rooftop solar is also an important but partial victory which still leaves a lot of uncertainty about the future of solar net-metering for Kentucky Power customers. The PSC gave Kentucky Power the option to implement their extremely low net-metering credit, with the risk that they might need to refund solar customers if the PSC requires a higher credit for net-metered solar energy in the future. Kentucky Power has two weeks to decide if it will do so. The PSC expects to issue a final ruling on net-metering by May 14, 2021.

To fight this rate proposal, KFTC joined with Mountain Association (formerly MACED) and the Kentucky Solar Energy Society to intervene in the rate case before the Public Service Commission. Together our groups were represented by attorney Tom FitzGerald of Kentucky Resources Council. Our allies at Mountain Association and Kentucky Solar Energy Society provided expert testimony in the case before the Public Service Commission, and together we hired an additional expert witness who also provided written and oral testimony during a hearing which lasted six full days.

KFTC also activated Kentuckians to make their voices heard in this case, and we collaborated with a broad set of affordable housing and solar energy advocates in the region and across the state. Using peer-to-peer texting, phone banking, social media ads, a statewide webinar, and direct mail, we:

• Informed more than ten thousand households affected by this rate case and supported people to take action. 

• Mobilized nearly 250 people who used our website to submit written comments to the PSC.

• Turned out dozens of people to testify during three virtual public hearings. 

Congratulations and thank you to everyone who helped secure this positive outcome. 

Next steps

KFTC and our allies have now turned our attention to opposing a similar rate increase being brought by Kentucky’s two largest utilities, Louisville Gas and Electric and Kentucky Utilities. In early January KFTC, Metropolitan Housing Coalition, Mountain Association, and Kentucky Solar Energy Society were accepted by the PSC as co-interveners in that case. We are again represented by Tom FitzGerald and the Kentucky Resources Council. 

It is crucial for KFTC members to remain attentive to the Public Service Commission, whose actions impact economic, energy, and climate justice. Stay tuned for more information from KFTC about the LG&E / KU rate case and ways to make your voice heard.