FRANKFORT, KY – The Kentucky Public Service Commission issued an order today approving Kentucky Power’s $63.66 million rate case settlement agreement.  The agreement was reached with rate case intervenors last month and concludes a base rate case the company filed in December 2009.
 
Under terms of the settlement agreement and subsequent Commission order, a residential customer using 1,427 kilowatt hours of electricity per month will see a rate increase of 16.84 percent or approximately $19.29 per month.  The residential per-kilowatt-hour charge will increase from 7.19 cents to 8.59 cents.
 
Kentucky Power sought the rate increase to recover increasing costs of operations and to make the necessary investments to maintain and improve the reliability of its infrastructure. It is the first base rate case the company filed since 2005; Kentucky Power customers last saw a base rate increase in 2006. Customers will see the rate change effective for electricity service rendered on and after June, 29, 2010.
 
Included in the order is a monthly charge of 15 cents per residential customer that will be used to fund a heating assistance program for low-income ratepayers. The company will match that at 12.5 cents per residential meter, per month, raising approximately $472,000 each year for low-income heating assistance programs.  Previously, approximately $172,000 was raised for that purpose. The company will work with local Community Action agencies in the counties it serves to administer the funds.
 
“We are pleased the Commission has issued an order approving our settlement agreement,” said Kentucky Power President and COO Tim Mosher. “In challenging economic times it is difficult to seek a rate increase, but in this case it was necessary for us to continue to provide safe and reliable power to our customers,” he said, adding, “Despite the increase, electricity remains a good value for our customers.”
 
“The settlement includes increased dollars for reliability, including additional resources to advance and expand our tree and right-of-way maintenance programs.  This will lead to improved reliability for our customers, particularly on remote or rural circuits,” Mosher said.
 
In another filing considered separately by the Commission, Commissioners rejected Kentucky Power’s proposal to purchase 100 megawatts of wind power annually.  The company asked for the renewable energy in anticipation of future state and or federal renewable energy mandates, but Commissioners determined it was not in the best interest of ratepayers since no such mandates currently exist.
 
Kentucky Power is an operating unit of American Electric Power and provides electricity to approximately 175,000 customers in all or part of 20 Eastern Kentucky counties.
 
American Electric Power is one of the largest electric utilities in the United States, delivering electricity to more than 5 million customers in 11 states. 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. AEP’s transmission system directly or indirectly serves about 10 percent of the electricity demand in the Eastern Interconnection, the interconnected transmission system that covers 38 eastern and central U.S. states and eastern Canada, and approximately 11 percent of the electricity demand in ERCOT, the transmission system that covers much of Texas. AEP’s utility units operate as AEP Ohio, AEP Texas, Appalachian Power (in Virginia and West Virginia), AEP Appalachian Power (in Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana and east Texas). AEP’s headquarters are in Columbus, Ohio.
           
###