Beshear: Low-Income Advocates Must Have a Voice in Utility Rate Cases

AG’s office files Kentucky Supreme Court brief in support of low-income advocates

FRANKFORT, KY. (May 31, 2019) – Attorney General Andy Beshear and his Office of Rate Intervention filed a friend-of-the-court brief with the Kentucky Supreme Court in support of low-income advocates having the ability to participate in utility rate cases.

The court case began when the state’s Public Service Commission (PSC) denied Metropolitan Housing Coalition, the Association of Community Ministries, and Community Action Council for Lexington-Fayette, Bourbon, Harrison and Nicholas Counties involvement in the recent LG&E/KU rate cases. For nearly two decades, one or more low-income advocates have been granted participation in LG&E or KU rate cases.

As attorney general, and while the case has proceeded in the lower courts, Beshear has fought to protect Kentuckians from unfair rate increases from investor-owned utilities and supported the interest of low-income advocates.

“These organizations deserve a seat at the table,” said Beshear. “They stand ready to provide expertise on how particular proposals impact low-income Kentuckians and they need to be heard.”

In April, the LG&E/KU rate cases were partially settled. The Office of the Attorney General’s efforts and other intervenors, resulted in the PSC reducing LG&E/KU’s requested increase by more than $95 million a year.

The PSC also approved increases and changes to the customer charge, which Beshear said would prove harmful to Kentucky families and make it nearly impossible for them to budget for their monthly utility payments. Beshear also expressed concern that the commission’s decisions were made without the full involvement of low-income advocates.

“We need many voices beside us as we fight to protect Kentucky families from excessive rate increases,” said Beshear.

Franklin Circuit Court initially reinstated the low-income advocates as parties to the case, before the Kentucky Court of Appeals held that Franklin Circuit Court did not have the jurisdiction to decide the matter. Following additional briefing, the Kentucky Supreme Court will render a decision on whether low-income advocates can participate in these cases moving forward.

While the PSC is not currently required to consider affordability when making rate case decisions, Beshear has fought to change the law and sought stronger protections for utility customers before the state’s regulatory agency.

Earlier this month, based on the work of Beshear’s office, the PSC denied a requested rate increase and instead decreased current rates of Atmos Energy, saving nearly 177,000 Kentuckians in 36 counties almost $15 million annually.

The Atmos Energy case is one of five major investor-owned rate cases in which the attorney general has fought on behalf of Kentucky families in the past eight months.

The unprecedented number of cases affects Kentuckians in approximately 90 counties and could have increased annual rates by nearly $200 million. Through the attorney general’s involvement in the first four cases, Atmos Energy, LG&E, KU and Duke Energy, Kentucky families will save more than $113 million a year.

In the fifth case, involving Kentucky-American Water, hearings were held May 13-14. The attorney general has proposed a significant reduction to Kentucky-American’s proposed revenue increase and is advocating that the PSC deny the utility’s request for an annual tracker mechanism that provides for recovery of investment between rate cases, thus resulting in constant, annual rate increases.

Beshear’s Office of Rate Intervention serves as a watchdog for consumers in matters relating to health insurance, natural gas, water, sewer, electric and telephone rates. Under Kentucky law, the office is responsible for representing the interests of Kentucky consumers before governmental ratemaking agencies, concentrating on utility cases before the PSC.

Under Beshear’s administration, the office has helped Kentucky families avoid approximately $1.6 billion in proposed utility rate increases.