Beshear signs first bill of 2026 giving KY power customers relief after arctic freeze
Gov. Andy Beshear signed his first bill of the 2026 legislative session into law Thursday, granting utility companies facing higher-than-normal fuel prices this winter express permission to spread out the costs they pass on to ratepayers.
Senate Bill 172, sponsored by Sen. Phillip Wheeler, R-Pikeville, gives Kentucky’s Public Service Commission the flexibility to consider diluted fuel-cost applications, something the utility regulator has already done on occasion.
The move comes as many in Kentucky, especially in the eastern reaches of the state, face growing energy bills to power their homes.
Kentucky electricity bills can go up or down slightly every month based on the price their utility company pays to burn natural gas or coal or purchase energy from the grid. Extreme temperature swings can make those slight changes drastic as the market price for the underlying fuel responds to heightened demand.
Now, the PSC has the legislature’s express permission to smooth out fuel-cost recovery over several months so short-term market volatility causes less of a shock and customers have more certainty about their monthly bills.
“This is not a silver bullet,” Wheeler told the House Committee on Natural Resources and Energy Tuesday. “This is not going to eliminate the fuel adjustment clause. This is just about making it a little easier on working people around the edges until we can get back to a good energy policy.”
Frigid temperatures hastened in by Winter Storm Fern in late January and early February caused fuel surcharges to range from $30 and $100, Wheeler said.
The PSC, a three-member panel overseeing water, sewer, gas and electric companies and co-ops in Kentucky, has allowed utilities to spread out random price fluctuations before. American Electric Power-owned Kentucky Power, which serves far Eastern Kentucky, was granted the authority spread out several months of fuel-adjusted rates in early 2022 in response to concerns raised with the commission about volatility in monthly bills.
Kentucky Power is now actively pursuing another case with the PSC to spread out $5 million in January fuel costs over April, May and June. The utility has asked the company to decide on its case by Tuesday, Feb. 24. The company said its proposal would lower the average residential customer’s bill by $11 next month.
“Utilities have somewhat, occasionally, in the past done this,” Wheeler said of spreading out the fuel costs. “This would just simply make it more clear and allow the utility to essentially go about using this as a regulatory asset so it makes it a little bit easier, especially for investor-owned utilities, to use this tool.”
Wheeler said he coordinated with Beshear’s office to pass SB 172 quickly in order to give the PSC clear instructions on cases like Kentucky Power’s. The law took effect once Beshear signed it, giving utilities the option to request spread-out costs incurred during Winter Storm Fern before they begin issuing their March bills.
“The utilities would have to request this pretty soon or they wouldn’t be allowed to do it for this situation,” said Rep. Jim Gooch, R-Providence, who chairs the House Natural Resources and Energy Committee. “There is an emergency clause.”
This story was originally published February 20, 2026 at 7:06 AM.
