The Time to Speak Up is Now
In its most recent rate case, Kentucky Power clarified that population and industrial losses coupled with the need to increase revenue for investors, relative to its fixed costs, are significant reasons for the proposed 15% industrial rate hike, 14.9% residential rate hike, and 13% commercial rate hike. Annual statistical reports kept by the Kentucky Public Service Commission (PSC) reflect a sad tale. Over 12,000 residential customers have been lost in the past 14 years in its twenty-county eastern Kentucky service territory. In 2010, Kentucky Power sold 3,255,731,000 kWh of industrial power. By 2024, that number dropped to 2,016,139,000 kWh, a 38 percent loss. No doubt, our region is in trouble.
Most people living in eastern Kentucky do not need numbers on a chart to tell us that industries once depended on to feed our families have declined or, worse yet, completely evaporated. Coal, steel, and power, the bedrocks of our communities and local economies, have gone by the wayside.
Kentucky Power itself was a major player in declining power and coal jobs when it chose to decommission Big Sandy 2 in Louisa and invest millions of eastern Kentucky ratepayer dollars in the coal-burning Mitchell plant located just outside of Moundsville, WV – a plant that does not burn Kentucky coal, employ Kentucky citizens, or pay Kentucky taxes.
So here we are, looking for new industries to attract to our area and hoping the industries and businesses we do still have stay. None of this is for the faint of heart. To their credit, economic development teams across the region are aiming to create sustainable growth, foster innovation, and improve the quality of life in their communities. Adding another 15% to the industrial electrical rate, which is already one of the highest in the state, is not helpful.
More is needed, much more than just decently priced industrial electrical rates to attract and maintain industries and businesses providing good-paying jobs. Infrastructure is key as well.
As they say in the real estate market, our area of Northeast Kentucky has good bones. We have two major waterways, the Big Sandy and the Ohio River, rail services, and three major highways that pass through our area: I-64, US-60, and US-23. We are minutes away from the AA highway, a throughway to northern Kentucky and the industrial Midwest. We have regional airports nearby. Yet, we have failed to keep up.
Our electrical grid needs work. Extreme weather events due to climate change – hurricanes (the effects of which are felt here in Kentucky), ice storms, floods, and tornadoes are only growing in frequency and intensity. According to Climate Central, 83% of power failures can be attributed to weather changes. We must upgrade or suffer the dire consequences of inaction.
The aging grid in Eastern Kentucky requires a proactive approach to meet the needs of a region seeking a renaissance. Merely trimming trees and clearing brush does not guarantee a resilient power supply. Ratepayers deserve a reliable power supply that only comes from utilizing current technology.
Unfortunately, there has been a major issue at the Mitchell plant requiring significant capital and attention to address. One of Mitchell’s two concrete cooling towers is failing structurally at the over-50-year-old coal-burning plant and needs to be reinforced or replaced.
According to KY PSC records, the options to address the failing tower would be $375,956,757 for a new mechanical draft or $356,031,775 to shorten the tower. Either way means money out of the ratepayers’ pocket for an expense that is not long-term as the Mitchell plant, which Kentucky Power owns half of, is scheduled to be decommissioned in 2040. The amount needed will be in addition to the current proposed rate hike. Kentucky Power has stated they are seeking a federal grant to help with this expense; time will tell.
The complicated history Kentucky Power has with its ratepayers continues to lean toward customer rate unsustainability. A correction must take place.
We need companies providing good-paying jobs to locate in the service area to combat population loss, and those companies need fair electrical rates and adequate infrastructure. As a monopoly, ratepayers need Kentucky Power to manage its operations more effectively. The truth is, families in eastern Kentucky, who already pay the state’s highest average energy bills, can no longer bear the burden of questionable decisions by Kentucky Power, compounded by a hard-hit regional economy.
Written by Suzanne Barker Griffith and Paula Bowling
Suzanne Barker Griffith and Paula Bowling live in Boyd County and are active in local, state, and national issues of importance.
