Kentucky House Bill 134 could change utility rates and bills

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House Bill 134 could help utility companies save money, but critics say residents who pay for those utilities would be the ones footing the bill.

FRANKFORT, Ky. — A Kentucky lawmaker has proposed a bill he says would reduce the amount people have to pay for utilities, but other industry experts said the legislation would do the opposite .

For a utility company to raise the base rates consumers pay for gas, water, and electricity, it must get approval from the Kentucky Public Service Commission, the agency that regulates utility companies in the Commonwealth.

The process of raising rates can be quite cumbersome, which is why Rep. Jim Gooch, R-Providence, proposed Bill 341. He said the bill would streamline the process for rate cases.

Right now, Gooch said utilities often delay asking for rate increases for years because it’s an expensive process, and when they finally do, the rate hike can be drastic.

“What you have are rate increases that look like a hockey stick,” Gooch said. “They’re really hard for people to budget for. Your rate goes up dramatically and you can’t budget for that.”

However, some industry experts are concerned that HB341 will reduce the transparency of the pricing process.

“They’re going to file smaller rate cases every year, and those are going to, over time, add up to as much rate case spending as a larger rate case every four or five years,” said Andrew Melnykovych, former Kentucky Public Service Commission Spokesman. “Also, they are going to result in higher rates because there will be less control and less recoil.”

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Melnykovych said typically, responders — third parties in utility pricing cases — ask hundreds of questions so they can get a thorough understanding of a utility’s finances and operations. This legislation would only allow them to ask the utility companies 50 questions about the changes they are proposing.

“You try to explore every detail of what this utility is asking for and why,” Melnykovych said. “Fifty questions, which is the limit in a data request, you can’t even scratch the surface with that.

Gooch said rate cases are costly for utility companies.

“I’m told if we look at the last six rate cases, those cases total about a billion dollars to file and present,” Gooch said.

By speeding up the process, Gooch said he thinks it will save taxpayers money.

“The consumer ultimately pays the cost of this rate increase, so we think a bill like this could actually reduce costs,” Gooch said.

Melnykovych, who worked at the commission for 18 years, disagreed and said the cost of tariff cases amounts to pennies a month for individual taxpayers.

“Do you prefer to pay a tiny portion of your bill to ensure that the tariff is properly reviewed and that the people who fight on behalf of customers have an adequate opportunity to participate in the process, or do you prefer to reduce the expense of tariff in exchange for a blank check to the utility,” Melnykovych said. “That’s what it boils down to.”

Melnykovych said he was concerned that this bill would lead to a less transparent process because in most cases, utilities could decide whether or not to hold public hearings.

“You’ve restricted public access, you’ve restricted intervenor access, and you’ve potentially, if the utility doesn’t want to hold a public hearing, put the whole process behind closed doors,” Melnykovych said.

“We have always believed that it is healthy to have an open and transparent process offered under the current structure of the Kentucky Public Service Commission,” a spokesperson for LG&E and KU said in a statement. sent by email. “While it can sometimes get cumbersome for everyone involved, a transparent process is important to our clients.”

HB341 has not yet been debated in committee. Until that happens, it cannot be called to a vote in the House.

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