PSC Rules On Rate Increases Sought By Kentucky Power Company Commission defers decision on net metering, while providing important victories for ratepayers on most issues.
In a proceeding important to the future of rooftop solar in Kentucky, the Kentucky Public Service Commission issued its first order in a utility rate case proposing changes to net metering. In Case No. 2020-00174, the investor-owned electric utility Kentucky Power Company (KPC) proposed changes to their net metering tariff, dramatically reducing the value of customer-generated solar energy fed into the grid, by some 75%. KPC also proposed raising residential rates by 25%, despite the economic hardships many of its customers are already facing in a region that has suffered an economic downturn for over almost two decades.
In its order, the Commission deferred a decision on KPC’s proposed changes to net metering, requesting additional testimony on how to properly value fed-in electricity. The PSC has established a new procedural schedule for reviewing KPC’s net metering proposal and will issue a final ruling no later than May 14, 2021. The Commission cited KPC’s lack of a “cost of service” study as a reason to defer a decision on their proposed net metering rates. They also rejected KPC’s argument that their “avoided cost” was the appropriate value for customer-generated solar energy.
Net metering was one of many issues of concern to a coalition of public interest organizations that intervened in the KPC rate case. The coalition, including Kentuckians For The Commonwealth, the Kentucky Solar Energy Society, and the Mountain Association, is represented by the Kentucky Resources Council. James Owen of Renew Missouri served as an expert witness for the coalition.
The PSC sided with the coalition on many issues important to residential ratepayers:
Over the objection of the coalition, the Commission approved the utility’s request to increase the monthly fixed customer charge that all residential customers pay, from $14.00 per month to $17.50 per month. Residential energy rates were increased from 9.8 cents per kWh to 11 cents per kWh, a 12% increase compared with the 25% increase sought by the utility. The rejection of a number of other requests by KPC did, however, significantly reduce the adverse financial impact of the residential rate increase.
Continuing to Advocate
The coalition of solar and community advocates will continue to work in support of net metering as the Commission deliberates upon KPC’s net metering proposal. Meanwhile, they have turned their attention to LG&E/KU’s rate cases (#2020-00349 and 00350). LG&E/KU have also proposed new net metering tariffs which would dramatically reduce the value of customer-generated solar energy to the “avoided cost” rate (under 3 cents per kWh).
KFTC, KYSES, and MA have joined with the Metropolitan Housing Coalition to intervene in these cases, once again represented by Tom FitzGerald of the Kentucky Resources Council.