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Utility hikes hit poor the hardest

Johny Alford was doing OK financially until he lost the love of his life and a substantial portion of his household income.

Now he still gets his $682 Social Security check each month, but not his wife's $400 check.

He's had problems paying utility bills and worries about what will happen if his light and water bills get even higher because of proposed rate increases.

"I never had to ask for nothing until my wife died, then I just got down," he said.

Alford, 73, who lives near Lexington's Georgetown Street, has had to ask the Community Action Council for help when his check runs out before the month does.

Jack Burch, the non-profit agency's executive director, said tough economic times have greatly increased the number of people coming in his door looking for help with utility bills.

"Some people had a really good job, and they're working retail now," he said. "They were making $25 an hour, and now they're making $8."

Also, he said, people receiving Social Security and Supplemental Security Income didn't get a increase in 2010 because inflation remained low.

The 37 percent rate increase proposed by Kentucky American Water would add $9.44 to the average customer's monthly bill. Kentucky Utilities has asked for a hike that could add $11.70 for its average customers.

That translates to $254 a year, or 2.4 percent of the income of a senior citizen living on a fixed income at the federal poverty level, said Charlie Lanter, who is Community Action's manager of program development.

"It is an impossible choice for some individuals and families where $20 a month is the difference between eating and taking important medications," Lanter said.

Both utilities have programs designed to help people with low incomes.

Kentucky Utilities' customers donated $47,780 to that utility's Winter Care program last year, and the company added $70,200, company spokesman Cliff Feltham said. The program has been around since 1983 and has grown over the years, he said.

Kentucky American's Help to Others, or H2O, started in 1997 with $5,000 from the company. This year, that amount will be $60,000, company spokeswoman Susan Lancho said.

Money in the funds goes to Community Action, which distributes it to low-income people who can't pay their bills.

Both companies also take steps to help customers use less of what they're selling, Feltham and Lancho said.

For KU, that means providing free energy audits to help customers find places where warm or cool air is leaking out of their houses. For Kentucky American, it means providing leak-detection kits to Community Action to distribute to its clients.

Burch, the Community Action director, said the funds provided by the utilities and their customers each year aren't enough to meet the growing demand.

Community Action routinely intervenes when utility rate cases are argued before the state Public Service Commission.

For the current cases, it is considering proposing some kind of "lifeline" program that would allow low-income people to pay a very low amount for a minimum amount of water and electricity, Burch said. Such plans have worked in a few other places, he said.

But they might run into problems in Kentucky.

Andrew Melnykovych, a spokesman for the PSC, said state laws and regulations prohibit his agency from approving preferential rates for any class of customer.

Lancho said Kentucky American proposed in a 2004 rate case that it give a break to customers at or below the federal poverty level. The attorney general's Rate Intervention Office supported the idea, but the PSC rejected it, she said.

Feltham said Kentucky Utilities had studied the lifeline concept but agreed the issue apparently is moot under current laws and regulations.

But Burch, faced with a growing demand from people who can't afford to keep their lights on and water running, said something has to be done.

"I'm starting to think that some of the old solutions don't work," he said. "Assistance funds don't solve many problems, and I'm not sure they're even Band-Aids any more."

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