Frankfort: The Kentucky Public Service Commission has approved, with modifications, a settlement agreement granting a rate increase to Kentucky Power Co.
The agreement allows Kentucky Power to increase annual revenue by $45.4 million, which is 57 percent of the amount sought by the company in its application.
As part of the settlement, Kentucky Power agreed to drop its appeal of an earlier PSC decision that disallowed certain fuel costs, saving the company's customers a total of about $54 million.
In an order issued Monday, the PSC altered several provisions in the settlement agreement, including shifting a portion of the rate increase for residential customers from the monthly customer charge to the charge for electricity consumption.
Kentucky Power, a subsidiary of American Electric Power Co., has about 173,000 customers in 20 counties in Eastern Kentucky. Its last base rate increase was in June 2010.