December 8, 2017
Ky. Power says new facility with nearly 1,000 jobs coming to Pikeville ‘because of work we have done’
FRANKFORT, Ky., – One day after news of a new manufacturing facility that will employ nearly 1,000 in Pikeville became public, Kentucky Power told the Public Service Commission how its economic development programs helped bring those jobs to eastern Kentucky.
Enerblu, an energy innovation company, plans to employ 875 with an average annual salary of $81,000 at a new facility to be built in at the Kentucky Enterprise Industrial Park in Pikeville and about 110 in headquarters in Lexington. The manufacturing facility will manufacture storage batteries and other energy solutions when it opens in 2020.
“Enerblu is there because of the work we have done,” Brad Hall, external affairs manager for Kentucky Power said. “Four years ago this site was master planned to be a golf course and subdivision and the mayor would not waiver on that. Through a study (we funded) and the work we did, the city saw the opportunity to rezone it as industrial. … Now there will be well over 1,400 jobs in that park providing great wages in Pikeville and eastern Kentucky.”
Hall’s comments came during the third day of an official hearing before the Commission this week. In June, Kentucky Power filed a base rate review request with the PSC seeking to recover $69.6 million from customers. A settlement reached last month and presented to the Commission for consideration lowered that request to an overall increase of $34.7 million.
On Friday, Hall provided details about the Commission-approved Kentucky Power Economic Growth Grant (K-PEGG) program. The K-PEGG program is a partnership between Kentucky Power customers and stockholders. Each month customers contribute 15 cents through the Kentucky Economic Development Surcharge.
In the settlement agreement, the economic development surcharge for residential customers would decrease from 15 cents to 10 cents and increases commercial and industrial customer contributions to $1. All economic development fees collected from customers will continue to be matched by the company to generate nearly $1.1 million a year to invest back into eastern Kentucky.
“We’re seeing solutions from these programs; we’re seeing results,” Hall said. “When I’m going to put 875 $81,000 a year jobs in Pikeville Kentucky, that’s impactful. That’s real.”
The Commissioners can approve, modify or reject the settlement agreement. If approved, new rates would go into effect in mid-January. During the hearing, Commissions hear testimony, ask questions of witnesses and make comments in the case.
In addition to testimony about economic development, Commissioners also asked about Kentucky Power’s efforts to assist customers on fixed incomes. They also read two letters from customers as examples of many they received. The settlement proposes increasing funding for the Home Energy Assistance Program (HEAP) to assist low income customers.
Commissioners also heard testimony on a mechanism that would track mandatory federal spending on transmission to maintain and upgrade the grid. Such spending has become more important with the advent of cybersecurity and needed upgrades to maintain reliability. The settlement creates a tracker to allow Kentucky Power to recover 80 percent of those costs. The company had indicated that it would have to file another case immediately if the mandatory federal transmission costs were not accounted for in this case.
Alex Vaughan, a regulatory pricing and analysis manager for American Electric Power, told the Commission that the tracker is a must for Kentucky Power.
“If it is approved, Kentucky Power has a legitimate opportunity to earn a return on its investment,” Vaughan said. “If it is not approved, we have no opportunity. We are still absorbing 20 percent of those costs.”
The compromise reached on transmission costs and other issues illustrate the balance in the settlement agreement, said Kentucky Power President Matt Satterwhite. If approved, Kentucky Power agreed it would not seek an update to its general base rates until at least 2021. This essentially provides customers with a three-year stay out of changes to base rates.
Under the settlement agreement, the residential customer rate would increase approximately 9 percent. The original rate adjustment filing with the PSC had residential customer rates increasing about 16 percent. Commercial and industrial customer rates would increase 3 to 7 percent, down from a requested 7 to 14 percent, based on usage.
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Kentucky Power, with headquarters in Ashland, provides service to about 168,000 customers in 20 eastern Kentucky counties, including Boyd, Breathitt, Carter, Clay, Elliott, Floyd, Greenup, Johnson, Knott, Lawrence, Leslie, Letcher, Lewis, Magoffin, Martin, Morgan, Owsley, Perry, Pike and Rowan. Kentucky Power is an operating company in the American Electric Power system.
