State lawmakers acknowledge recent storms could mean rate hikes

By Elizabeth Donatelli - bio | email
Posted By Mike Dever - email

FRANKFORT, KY (WAVE) - In a span of five months, Kentucky was hit by two storms - wind and ice - that caused  the first and second most power outages the Commonwealth has ever seen. On Thursday, lawmakers in Frankfort discussed more efficient responses for the future and what this means for your future bills.

After Jeff Derouen, Executive Director of the Public Service Commission (PSC), testified in Frankfort about the damage, he said there is a possibility Kentuckians will be paying more for their utilities in the future.

"I think it's fair to say these companies will come before the PSC and request some sort of reimbursement from cost," Derouen said.

This is to make up for some of the estimated $250 million the ice storm is costing utility companies statewide.

"The biggest cost is personnel costs," said Andrew Melnykovych, Director of Communications for the Kentucky Public Service Commission. "It's getting those thousands of workers housing, feeding, paying their salaries, paying all of that overtime."

Customers won't be footing the entire bill - more the electric co-operatives could be reimbursed for more than half.

"If they recover costs in any way, either form FEMA or they get some recovered from insurance, none of that is then reimbursed through rate payers," Melnykovych said. "There's no double dipping. I know there has been that allegation made."

The PSC will also look at ways to improve service including existing infrastructure. For example, Indiana is required by law to have the strongest equipment, including pole and wire strength, while Kentucky's requirements are one step down - or one tier down.

The committee will compare the regions boarding the Ohio River to see if weaker equipment caused significantly more damage.

"That would be evidence that we should perhaps ask for a higher tier," Derouen said of future equipment.

The PSC will publish a report on its findings this summer with recommendations and improvements for the future.