Public Service Commission approves Licking Valley rate increase

Monthly rates for customers of the Licking Valley Rural Electric Cooperative Corp. are set to go up starting Sunday.

The Kentucky Public Service Commission said Friday it had accepted a settlement that permits the electric cooperative to raise its rates to increase its annual revenue by $1.94 million, or about 7.7 percent.

A typical residential customer will see his or her base monthly electrical bill go up by about $9.10, a 9.4 percent increase. Licking Valley, which has about 17,500 residential and commercial customers in Breathitt, Elliott, Lee, Magoffin, Menifee, Morgan, Rowan and Wolfe counties, applied to the PSC for a rate increase in July.

The cooperative proposed then to increase its annual revenue by $2.07 million through rate hikes. Also on Friday, the PSC directed Licking Valley to investigate why a lot of the electricity it buys never reaches paying customers and to report the results of the investigation to the PSC in 90 days.

Line loss — the difference between the amount of electricity purchased by a utility company and the amount recorded as provided to customers — reached nearly 10 percent, an unusually high amount, in 2008.

The line loss came to light during the rate case, the PSC said. The PSC also encouraged Licking Valley to step up its efforts in energy efficiency and conservation. The electric cooperative last had a general rate increase in 1998.