The state Public Service Commission announced Tuesday that it has ended its management review of East Kentucky Power Cooperative.
In April 2010, the PSC issued a scathing management audit of the electricity provider, saying the 500,000 homes and businesses powered by the utility would have to band together and change it from the inside for it to stay viable.
The PSC ordered the audit by an outside consulting group because the cooperative's financial condition had worsened in previous years. The co-op had lost money during 2004 and 2005, and it narrowly had a profit in 2006.
"I commend EKPC for the time and effort it has devoted to implementing the audit recommendations," PSC Chairman David Armstrong said in a statement. "We recognize that it has been a challenge for EKPC and its member cooperatives to address the audit recommendations."
The audit made 29 recommendations, including that emphasis be placed on strategic plans to address issues including power supply, financial strength, rates and competitiveness.
It also took to task the leadership structure of the power cooperative. East Kentucky Power is owned by its 16 member cooperatives for which it produces power at plants across Kentucky. The management audit said a conflict of interest existed because East Kentucky Power is governed by the member co-ops, who are devoted to keeping their prices low and weren't willing to seek higher rates when East Kentucky needed the money to secure its finances.
Tony Campbell, CEO of East Kentucky Power, said in a statement that EKPC's board has "comprehensively examined board structure, composition, qualifications, education, training, development and compensation."
"Steps have been taken to ensure the board is properly engaged in its role, and that the proper checks and balances are in place to ensure that continues," he said.
Campbell also said the cooperative has established "a strong strategic plan."
"Through their hard work and dedication, the managers and employees of EKPC are bringing the strategic plan to life," he said.
Scott Sloan: (859) 231-1447. Twitter: @HeraldLeaderBiz.