12/16/2014
Ky Power seeks rate adjustment to fund investments to meet EPA rules and growing operating costs

FRANKFORT, Ky., er 16, 2014 – Kentucky Power, a subsidiary of American Electric Power (AEP), plans to ask the Kentucky Public Service Commission to adjust customer rates, the next step in a cost-conscious plan to meet increasing EPA demands. The adjustment also will pay for expanded tree trimming to strengthen service reliability and cover growing costs of doing business.

The request completes the recovery of Kentucky Power’s remaining commitment to purchase half of the coal-fired Mitchell power plant in Moundsville, West Virginia. That sale, approved by commissioners in 2013, replaces nearly all of the 800 megawatts produced by Unit 2 at Big Sandy, which is set to close in 2015. Purchase of the Mitchell plant, which burns some Kentucky coal, saves Kentucky Power customers nearly half a billion dollars over the $1 billion price tag of installing scrubbers on Big Sandy Unit 2. The scrubber option would have required a 31 percent rate increase to fund the equipment needed to meet new federal environmental rules.

“The Mitchell transaction has proven to be the most cost-effective choice we could have made for our customers as we work to comply with stricter EPA requirements,” said Greg Pauley, Kentucky Power’s president and chief operating officer. “We understand any increase is difficult for our customers. That’s why when we go before the Kentucky Public Service Commission for a rate adjustment, we do so only after a thorough review of the most economical way to serve our customers today and well into the future.”

One way Kentucky Power is addressing consumer needs is by increasing tree trimming to reduce outages. Since 2010, the company has doubled its contract forestry work force to clear rights of way and has worked to trim trees along every mile of line. The rate adjustment includes nearly $11 million to move toward a four-year trimming cycle to further improve reliability.

The company also is advancing the well-being of Eastern Kentucky by investing in the communities it serves, promoting economic development projects and making multiple contributions. Kentucky Power recently partnered with 12 area banks to finance $75 million in capital projects. And earlier this year, the Kentucky Power Economic Advancement Program, which is funded by AEP shareholders and not Kentucky Power customers, awarded $200,000 in development grants to three Eastern Kentucky projects – the Big Sandy area Development District, the City of Paintsville and the Louisa Chapter Southeast Kentucky Chamber of Commerce.

Kentucky Power also is an active participant in Shaping Our Appalachian Region (SOAR) initiative created by Gov. Steve Beshear and Rep. Hal Rogers, R-Ky., to improve the economy and quality of life in the region. In addition to its support of business development, Kentucky Power contributes millions of dollars to other causes within its service territory. From 2009 to 2013, Kentucky Power donated $3.1 million. About 40 percent of the money went to education, while 30 percent went to hunger and housing projects. The remaining funds were divided among multiple worthwhile projects. Kentucky Power also aids customers through its energy efficiency programs by providing home energy audits, heat pump rebates and free CFLs. Helping customers swap just five incandescent bulbs with compact fluorescents can save about $60 a year.

“We take seriously our role as a partner for progress in the areas we serve,” Pauley said. “To do that, we take into consideration our customers and strive to balance their needs with our needs to improve our infrastructure so that we can continue to provide safe and reliable electric service while keeping prices as affordable as possible.”

Kentucky Power’s request seeks nearly $70 million, a 12.48 percent overall increase. The exact amount of the increase will vary by customer class and usage. Under the proposal, residential customers using an average 1,362 kilowatt hours per month would see an increase on their monthly bills of about $22, or about 72 cents a day. Under the scrubber plan to meet EPA mandates, the average residential bill would have jumped nearly $43 a month, or $1.41 a day.

The requested rate adjustment fulfills the Settlement Agreement previously approved by the commission. Under the settlement, Kentucky Power agreed to accept significantly less than cost-based rates during the interim period between the Mitchell transfer and when new rates are approved by the commission following the retirement of Big Sandy Unit 2. The rate adjustment request is required to be filed no later than December 29, 2014. The Settlement Agreement also called for the establishment of an Asset Transfer Rider to collect $44 million to recover a portion of the Mitchell assets. Of the $70 million now requested, $37.7 million or 6.73 percent, is needed to complete the asset recovery, which is below the original estimate of 8.21 percent.

“We are extremely pleased that the Mitchell transfer represents a smaller percentage of the increase than we estimated it would be,” Pauley said. “This is good news for customers.”

The Mitchell acquisition is one part of Kentucky Power’s plan to ensure safe, reliable and affordable electric service for customers now and into the future. In addition to buying half of Mitchell, the company earlier this year received approval from the Kentucky Public Service Commission to convert Big Sandy’s smaller, 278-megawatt Unit 1 to burn natural gas instead of coal. The conversion, which is set to be completed in 2016, keeps half of the plant open and preserves several jobs.

Kentucky Power, with headquarters in Frankfort, Ky., provides service to approximately 172,000 customers in all or part of 20 eastern Kentucky counties. It is a unit of the AEP system, one of the largest electric utilities in the United States, with more than 5 million customers in 11 states, including Kentucky. AEP ranks among the nation’s largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the U.S. AEP also owns the nation’s largest electricity transmission system, a nearly 39,000-mile network that includes more 765 kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.

More From Kentucky Power

Mobile App Learn more

The Power is in Your Hands

Sign Up Now Pay Online for Free with Paperless Billing

Pay Online for Free with Paperless Billing

Use Online Form Report Outages On Your Mobile Phone

Report Outages On Your Mobile Phone

How We Restore Power Learn more

How We Restore Power

Learn the steps Kentucky Power takes to quickly and safely get the power back on

Visit AEP.com
Use of this site constitutes acceptance of the AEP Terms and Conditions. View our Privacy Policy. © 1996-2015 American Electric Power. All Rights Reserved.

Privacy Policy

Privacy Policy for Kentucky Power, a unit of American Electric Power (AEP)

Scope

This Privacy Policy applies only to KentuckyPower.com and the Kentucky Power customer mobile app (com.aep.customerapp.kentuckypower). Other AEP websites and apps may be governed by their own privacy policies, appropriate to the uses and needs of each. Throughout the site or app, we may provide links to resources and sites that are not part of KentuckyPower.com or the Kentucky Power customer mobile app. This Privacy Policy does not apply to those resources and sites.

Consent

By using this site or app, you consent to the terms of this Privacy Policy. Whenever you submit information via this site or app, you agree to the collection, use, and disclosure of that information in accordance with this Privacy Policy.

Information Collected

  1. Passively collected information

    During your use of this site or app, we may collect anonymous information about your visit here through the use of server logs, cookies, scripts, tracking pixels and other Web traffic tracking systems. This information is aggregated and used to improve user experience through analysis of user activities. This information is never combined with any of the personally identifiable information you may provide in your use of the features of this site or app.
  2. Personally identifiable information

    On certain forms of this site or app, you may be asked to provide information about yourself or your account with us, either to identify yourself to us or to request a service from us. In each case, we will inform you what information is provided at your option and what information is required to complete the transaction or activity you are engaged in. If you are unwilling to provide this required information, you will be unable to complete the requested transaction.

Use and disclosure of information

The information you provide to us will be used to respond to requests you may make for services. Some or all of this information may be added to your permanent account record and may be used for research purposes.

In addition, we may use elements of this information in the following situations:

  1. We may transfer the information to Kentucky Power’s affiliates and subsidiaries, unless such transfer is prohibited by law;
  2. We may transfer the information as part of a merger, consolidation, acquisition, divestiture or other corporate restructuring (including bankruptcy);
  3. We may make the information available to third parties who are providing the product, service or information that you have requested (but not your password);
  4. We may make such information available to third parties who are providing services to Kentucky Power (for example, providing the information to third parties performing computer-related services for Kentucky Power);
  5. We may use the information to communicate with you about products and services that may be of interest to you.
  6. We may disclose the information if we form a good-faith belief that disclosure of such information is necessary to investigate, prevent, or take action regarding any illegal activities or regarding interference with the operation of our site or violation of its terms of use; or
  7. We may disclose the information if we believe that disclosure is required by law or regulation or in response to a subpoena or other order of a court or other governmental agency.

Kentucky Power uses Flurry Analytics Service (provided by Yahoo) in order to improve its mobile apps. Flurry’s privacy policy governs the use of this information.

Also, Kentucky Power reserves the right to share any aggregated information (i.e., non-personally identifiable information) with any third parties for any reason, unless prohibited by law.

We will not sell, rent or otherwise disclose the information we gather about you or your account to any third party, except as outlined in this Privacy Policy.

Security

Kentucky Power takes reasonable steps to protect your personally identifiable information as it is transferred to us, through the use of Web technologies such as the Secure Sockets Layer and others. However, no Internet transmission of information is ever completely secure or error-free. In particular, e-mail sent to or from Kentucky Power may not be secure.

How to Reach Us

If you would like to update your personally identifiable information or if you have questions about this privacy policy, please contact us.

Changes to This Policy

Kentucky Power reserves the right to change this Privacy Policy at any time. If this Privacy Policy changes, the revised policy will be posted to this site. Please review this Privacy Policy before you provide any personally identifiable information through this site. Use of our web site after the posting of a revised privacy policy constitutes your consent to the revised policy.

This policy was last revised on December 13, 2017.

Close ×

Sign Up For Alerts

Subscribing to Kentucky Power alerts gives you instant notification for:

  • Billing & Payments - avoid late payments and disconnection
  • Outage Updates - find out if there's an outage at your address and when power will be back on

Win an Xbox One with Alerts!

Enroll in alerts to be eligible to win. Subscribing to I&M alerts gives you instant notification for:

  • Billing & Payments - avoid late payments and disconnection
  • Outage Updates - find out if there's an outage at your address and when power will be back on

Loading video...

×