Kentucky PSC discusses ways to simplify rate adjustments for rural electric distribution cooperatives

The Kentucky Public Service Commission (PSC) said Wednesday that it would implement on a pilot basis a revised process to simplify how rural electric distribution cooperatives apply for rate adjustments.

“This effort is very much in keeping with Governor Bevin’s initiative to reduce unneeded regulatory red tape,” PSC Chairman Michael Schmitt said in a statement. “It can benefit the cooperatives and their member ratepayers by reducing the cost of filing rate adjustments and also reduce the amount of time and effort the PSC must expend on these relatively straightforward rate cases.”

The rate adjustment request must be for no more than a four percent increase and no more than 0.75 percent for each year since the cooperative’s most recent base rate adjustment to qualify for the streamlined process. The rate increase limitation covers only the distribution cooperative’s operating costs and does not include pass-throughs of generation and transmission costs.

If a cooperative qualifies, the PSC will process the case within 75 days. The current process can take as long as ten months.

The PSC opened the 30-day period for any interested party to submit comments on the proposed streamlined process. Absent a further decision by the PSC, the streamlined process will take effect 15 days after the end of the comment period.

Once the process takes effect, the PSC will consider applications on a case-by-case basis. The process will remain in place on a pilot basis until the PSC determines whether it is effective. The PSC will review the process periodically, and the first review will be completed within 18 months.

The streamlined process applies to the 19 rural electric distribution cooperatives under PSC Jurisdiction, which includes the 16 cooperatives that own and purchase power from the Eastern Kentucky Power Cooperative and the three cooperatives that own and purchase power from the Big Rivers Electric Corp.