Eastern Kentucky electric bill climbing? Why customers are seeing a new charge
As the summer heat sends electricity bills soaring, Kentucky Power customers are facing a new monthly surcharge.
Recently, Kentucky’s Public Service Commission, the state’s utility regulator, announced customers would start seeing the “securitized surcharge” on their bill beginning June 30. The change means an increase of about 6.37% to the total bill for a residential customer using 1,000 kilowatt hours, the PSC said in a news release.
While the additional charge comes as customers’ bills are already elevated for the summer season, the PSC says it’s part of a cost-saving process. Without it, Kentucky Power customers would see an increase of more than 13%, the regulator said.
The new charge affects rural customers in particular, given Kentucky Power covers 20 counties in Eastern Kentucky. Based in Ashland, the company serves some 162,500 customers in the Bluegrass State, according to the PSC. Kentucky Power is a subsidiary of American Electric Power.
“Kentucky Power acknowledges the significant impact that rising costs across the nation have on the communities we serve,” communications manager Sarah Nusbaum wrote in a Thursday email. “We are pleased to report that the implementation of a new cost recovery tool has facilitated a substantial reduction in expenses for our customers. We extend our gratitude to the legislators who supported the passage of Senate Bill 192, as well as to the Public Service Commission for permitting us to securitize specific costs, such those caused by storms, for the benefit of our customers. As a result of securitization, our customers will collectively save $97 million.”
According to Nusbaum, surcharge amounts to a $14 monthly increase for a residential customer using 1300 kWh.
What’s behind the new fee for Kentucky Power customers?
The new monthly surcharge is the result of a financing process called “securitization,” and according to the PSC, it was approved by Kentucky’s General Assembly.
Essentially, securitization allows utilities to finance certain costs with approval from the commission.
Senate Bill 192, which state lawmakers passed in 2023, allows the PSC to approve securitization for qualifying utilities, and this new charge is the result of Kentucky’s first securitization case.
In this case, Kentucky Power is issuing bonds to recover costs, including from the retirement of its Big Sandy coal-fired plant, the commission said.
“Customers would have seen a substantially higher charge for these expenses — and would have already been paying it for the past year or more — if not for the securitization process,” PSC Chair Angie Hatton said in the release.
“While seeing a new charge on a utility bill is never something customers want, this process has resulted in both an overall reduced monthly amount for individual customers, and approximately $90 million in total customer savings” over 20 years, Hatton said.
How can customers save money on their electric bills during the summer?
One of the most effective ways to save money on your summer electric bills is to optimize your air conditioner’s performance.
You can do that by following these tips:
- If you have central air, have your units serviced annually. Replace filters every one to two months during the summer, Consumer Reports recommends.
- Outside air conditioner units accumulate dust, dirt and debris over time, which cuts down on your unit’s efficiency. Prolong your unit’s life by giving it a regular deep clean at least once a year.
- If you have window units, they should ideally be installed in north-facing or shaded windows. It also pays to inspect the units to see if they need weather striping or insulation to seal in cool air.
Other general tips for keeping your home cool in the summers include:
- Close your curtains and blinds, especially ones facing south that bake in the sun all day.
- Ventilate and circulate the air, flowing cooler air to warmer spots in your home.
- Try to minimize using your oven or stove or be tactful about when you do cook.
- Put off doing chores until the heat of the day has passed. Running the dishwasher, the dryer or other appliances can be sources of heat in your home.
- Take short, cooler showers to reduce heat-trapping humidity in your home.
Do you have a question about utility services or companies in Kentucky for our service journalism team? Send us an email at ask@herald-leader.com or fill out our Know Your Kentucky form.
This story was originally published July 10, 2025 at 11:53 AM.