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KY Power to Increase Energy Assistance, Efficiency Funding

October 18, 2013 — Earlier this week, the Kentucky Power Company accepted modifications made by the Kentucky Public Service Commission (PSC) to a settlement agreement. While the case focused on the utility wanting to purchase part of a West Virginia generating facility, the final agreement also increased Kentucky Power's funding for low-income energy assistance and efficiency.

Earlier this month, the PSC issued an order approving Kentucky Power's proposal to buy a 50 percent interest in West Virginia's Mitchell Station. The commission said it was "by a wide margin" the least costly option to maintain the company's generating capacity when Kentucky Power retires its Big Sandy plant. The Mitchell Station proposal will cost about $536 million, while upgrading the Big Sandy plant to meet environmental compliance would cost nearly $1 billion.

In its order, the PSC said the settlement provided "additional, substantial benefits to ratepayers." The final agreement included Kentucky Power increasing its shareholder contribution to the Home Energy Assistance Program by 20 percent, which brought the overall annual budget to $522,000. Local community action agencies administer the program, which is open to Kentucky Power customers eligible for LIHEAP.

The agreement also increased the budget for Kentucky Power's Demand-Side Management/Energy Efficiency programs. The annual budget will increase from the current $3 million to $6 million in 2016. Low-income weatherization is among the utility's offerings and generally comprises about 13 percent to 15 percent of the overall efficiency budget.

Opponents to closing down the Big Sandy plant mentioned that 150 good-paying jobs would be lost, along with local tax revenue. As part of the settlement, the PSC required the company to give $233,000 for economic development to Lawrence County every year for five years. The Kentucky Community and Technical College System with get $33,000 of that to provide job training in the areas of weatherization and energy efficiency. The PSC ordered that ratepayer money couldn't be used to pay for the economic development funds.

Sources: Media report, Kentucky Power, Kentucky Public Service Commission>