The area's leading online source for news!
Louisa-Lawrence Co, KY

In God We Trust - Established 2008

Menu

April 30, 2018

PSC GRANTS RATE  INCREASE TO BIG SANDY RECC; APPROVES INTERIM RATE DECREASE FOR COLUMBIA GAS

Kentucky Press News Service

ENERGY PRICES ARE UP AND DOWN AND A VACUUM NOW EXISTS BETWEEN FORMER COAL USING POWER PLANTS WHICH ARE NOW USING GAS. BELOW ARE BOTH SIDES OF TH STORY AT LEAST AS FAR AS RECC IS CONCERNED...

 

FRANKFORT – The Kentucky Public Service Commission has granted Big Sandy Rural Electric Cooperative Corp. (Big Sandy RECC) a revenue increase slightly larger than the amount requested by the electric distribution cooperative, a PSC news release said.

With the rate increase granted by the PSC, a typical Big Sandy RECC residential customer will see their average monthly electric bill rise by about $7. That includes a $6.25 increase in the monthly customer charge, to $21.25 from the current $15, as proposed by Big Sandy RECC.

The new rates took effect Thursday, April 26, with the issuance of the PSC’s final order in the case. Big Sandy RECC’s last rate increase was in October 2012.

In that order, the PSC granted Big Sandy RECC an increase in annual revenue of just over $1 million. The utility had requested a revenue increase of $927,642.

However, in analyzing Big Sandy RECC’s finances, the PSC found that additional revenue was needed in order to maintain the utility’s financial health and to allow it to meet its obligations to its lenders.

Big Sandy RECC has nearly 13,000 customers in eight eastern Kentucky counties: Breathitt, Floyd, Johnson, Knott, Lawrence, Magoffin, Martin and Morgan. It is one of 16 electric distribution cooperatives that together own and purchase power from the East Kentucky Power Cooperative.

In a rate adjustment application filed in October 2017, Big Sandy RECC stated that it needed additional revenue in order to cover increasing operational costs and to maintain the utility’s ability to meet the terms of its agreements with its lenders.

The PSC made several adjustments to the revenue amount requested by Big Sandy RECC, with the largest involving the proper accounting of flood disaster recovery payments received by the utility from the Federal Emergency Management Agency. When combined with other adjustments, the net effect was a revenue increase larger than requested by Big Sandy RECC.

The PSC also made some changes to the allocation of the revenue increase to different classes of commercial and industrial customers in order to better reflect the cost of providing service to those customers.

Finally, the PSC granted Big Sandy RECC’s request to extend the time that customers have to pay their bills from the date of the bill. It will now be 20, rather than 15, days.

The PSC conducted a public evidentiary hearing on Big Sandy RECC’s application on March 27. There were no other parties to the case.

The April 26 final order, a video of the evidentiary hearing, and other records in the case are available on the PSC website, psc.ky.gov. The case number is 2017-00374.

###


PSC approves interim rate decrease for Columbia Gas because of Trump tax decrease for corporations

Kentucky Press News Service

FRANKFORT – The Kentucky Public Service Commission has approved an interim rate decrease proposed by Columbia Gas of Kentucky, Inc., to reflect the federal corporate income tax reduction which took effect this year.

As a result, the amount Columbia charges to deliver gas will decrease for all customer classes. Residential customers will see an immediate reduction of 22 cents per 1,000 cubic feet (mcf) of natural gas used, a PSC news release said.

Because natural gas usage often fluctuates dramatically with the time of year, the effect on residential customer bills will vary. A residential customer who heats with natural gas and uses 10 mcf per month in the winter will see a reduction of $2.20 in the monthly bill as a result of the interim rate reduction.

But further changes to Columbia’s rates will come later this year.

The interim rate reduction addresses only Columbia’s current federal corporate income taxes. Yet to be addressed is the more complex question of the accounting for deferred tax liabilities carried on the utility’s books, as well as Columbia’s tax savings in the first four months of this year. The federal tax cut was enacted in December and took effect January 1, 2018.

Columbia said it has not yet been able to calculate those savings, in part because it has not yet received needed guidance on certain issues from the Internal Revenue Service (IRS).

In an order issued Monday, the PSC directed Columbia to determine the additional tax savings by Sept. 1, and to begin reflecting those savings in rates by Oct. 1. In the event that the IRS has not yet provided the guidance requested by Columbia, the utility is to estimate the savings and reduce rates accordingly, the PSC said.

The PSC late last year began reviewing the results of the federal corporate income tax changes on the rates of Kentucky’s investor-owned utilities. The PSC initially opened a combined investigation into the rates of several natural gas distribution companies and subsequently restructured the proceeding to address each utility separately.

The rate reduction applies only to Columbia’s base rate, which covers the utility’s cost of operating and maintaining its system, as well as any profit margin. The commodity cost of the gas itself, which is adjusted quarterly to reflect market prices, is determined separately and is passed through to consumers on a dollar-for-dollar basis by Columbia. Because there is no additional profit for the utility, the commodity cost is not affected by Columbia’s tax rate.

The Kentucky Office of Attorney General is a party to the Columbia case.

Monday’s order and other records in the case are available on the PSC website, psc.ky.gov. The case number is 2018-00041.

 

 

Comments  

+3 #1 wow 2018-05-01 12:02
who pockets are being lined by AEP? a rate increase really?? We are already paying one of the highest rates in the nation. I remember when AEP shut down the plant in Lawrence they said it would be cheaper for the customers, that was a lie. They have taken several rate increase since. There needs to be an investigation into who and whom are profiting from this gouging of this area by AEP and they need to be held responsible.
Quote

Add comment

Security code
Refresh

SOMEMRSEP