East Kentucky Power Cooperative Files for Rate Increase
East Kentucky Power Cooperative, wholesale electric supplier for South Kentucky RECC, has filed for a rate increase with the state’s Public Service Commission, the utility governing body. The proposed rate increase would be a “pass-through” to South Kentucky RECC members.

EKPC is asking for a 6.6 percent increase, which would increase the average residential bill by about $3 to $5 per month.

“East Kentucky Power’s price adjustment is necessary in order for it to operate and maintain the generation and transmission facilities needed to meet the power requirements of South Kentucky RECC and its 15 other member systems,” said Allen Anderson, CEO of SKRECC. “The proposed wholesale power cost adjustment will increase our total power cost by $4.5 million a year. The wholesale power cost makes up about 75% of our members’ bill. It is necessary for this increase to be passed through to our members in order for South Kentucky RECC to continue meeting our operating expenses.”

Anderson noted that SKRECC and East Kentucky Power both are not-for-profit, member-owned cooperatives. Although increases have been passed through in recent years to reflect rising fuel and environmental compliance costs, he stated that this is the first time since 1983 that EKPC has requested a base rate increase to meet its normal operating expenses.

East Kentucky Power will be asking the PSC for permission to implement the rate increase, and South Kentucky RECC will be asking permission to pass the increase through to members beginning on April 1, 2007. If approved, that means service rendered on and after April 1 would be subject to the new rates. If the Commission approves implementing the rate increase while the rate case is ongoing, then the rate hike would be subject to refund pending final resolution of the case.

Anderson noted that South Kentucky RECC offers several programs to help members reduce power consumption and increase comfort. In addition, SKRECC offers a levelized billing program to reduce the volatility of monthly bills. Call your local co-op office for more information about these programs.

EKPC, which generates and transmits power to 16 member cooperatives in 89 Kentucky counties, has said the rate increase is necessary in order for the cooperative to continue providing reliable power and quality service to its member systems. For almost three years, EKPC has had significant operating losses due to several reasons, including rising construction, maintenance, and interest costs coupled with mild weather that reduced its sales. Anderson said, “The increase is necessary even though EKPC at the direction of South Kentucky RECC and the 15 other member systems have taken steps to reduce EKPC operating costs by almost $17 million for 2006 and an additional $30 million for 2007.”

If the PSC grants the April 1 implementation date, the earliest that South Kentucky RECC members would see the rate increase would be on May bills.