Kentucky Power asks for another rate increase. This time for a W.Va. plant project
An Eastern Kentucky utility company already under fire for allegedly charging rural mountain residents too much to power their homes is now asking the state’s permission to pay half of a $191 million cooling tower construction project at a West Virginia coal-fired power plant it co-owns.
Kentucky Power submitted an application to the Kentucky Public Service Commission Tuesday to replace a 55-year-old cooling tower with a weakened concrete shell.
The company’s $95.5 million share of the project costs would add another $4.59 to the average customer’s bill by 2029, when the new tower is expected to be complete. That would be in addition to the extra $26.40 a month the company has asked the PSC to start charging customers in a separate rate case awaiting regulatory approval.
Smaller, 1% temporary rate impacts could occur during the construction phase of the project, the company said.
All combined, Kentucky Power customers could be facing more than $30 extra on their monthly power bills in three years time, including the slight increase the company got to re-up its investment in the West Virginia Plant last year. The increases leave one of America’s most impoverished regions paying the highest utility rates in the state.
Kentucky Power’s interest in the 1,560-megawatt Mitchell Power Plant near Moundsville, West Virginia, has been a source of tension for more than a decade, ever since the company announced its decision to retire a pair of Kentucky-based, coal-fired units at the Big Sandy plant in Lawrence County.
The Mitchell Plant does not employ Kentucky residents nor burn state-produced coal, a major sticking point that led then-Attorney General Daniel Cameron to oppose Kentucky Power’s reinvestment plant in 2021.
Company’s stake in W.Va. plant initially rebuffed
Citing the utility’s failure to plan for and acquire alternative sources of power, the PSC “reluctantly” signed off on Kentucky Power’s request to reinvest in the aging plant late last year, reversing its initial 2021 order that required the company to terminate its interest in the venture.
Attorney General Russell Coleman has already intervened in Kentucky Power’s request to rebuild the aging West Virginia cooling tower. His office took the rare step earlier this month of calling on the PSC to deny the company’s other 12.3% rate hike request outright, claiming Kentucky Power was taking advantage of ratepayers.
Kentucky Power has applied for a U.S. Department of Energy grant to help cover the costs of rebuilding the tower, part of a $625 million investment President Donald Trump’s administration unveiled in September to prop up the nation’s coal industry. It is unclear how much of an impact, if any, that would have on the total bill customer’s would be forced to foot under the company’s latest proposal.
Kentucky Power serves about 165,000 customers in 20 of the state’s easternmost counties along the border with Virginia, Ohio and West Virginia. It is wholly owned by American Electric Power Inc., a publicly traded company that has posted gross profit increases for the last two years, according to annual cash flow statements.
The company’s request to rebuild the cooling tower remains up to the PSC, a three-member panel of commissioners appointed by the governor who regulate utilities in Kentucky.
Kentucky Power seeks other ways to lower bills
Kentucky Power has also taken measures this month to lower the effect this winter’s unseasonably cold temperatures could have on power bills. The utility filed yet another case before the PSC last week seeking to spread out an extra $5 million in natural gas fuel costs it paid in January across multiple billing cycles.
Winter Storm Fern brought with it several weeks of sub-freezing temperatures across much of the commonwealth, driving up demand and cost of fuels like natural gas. Nightly temperatures the last week of January ranged in the single digits across much of Eastern Kentucky.
Kentucky Power said its proposal would lower the average residential customer’s bill by $11 next month. The PSC has granted similar requests by utilities, most recently for Kentucky Power in 2022. The company wants the agency to rule on its request by early next week.
Meanwhile, a bill making its way through the General Assembly in Frankfort right now would let utilities like Kentucky Power spread out fuel surcharges by as much as a year.
SB 172, first sponsored by Eastern Kentucky Republican Sen. Phillip Wheeler, of Pikeville, passed the Senate 38-0 last week and now awaits consideration in the House Natural Resources and Energy Committee.
