Inter-County requesting rate increase from Public Service Commission

Published 9:29 am Tuesday, June 12, 2018

Inter-County Energy has applied for a rate increase that, if approved, is estimated to cost the average residential electricity customer an additional $9.33 a month.

The request was made May 29 through the Public Service Commission, but the rates may not be approved and take effect until at least November.

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Jerry Carter, president and CEO of the energy cooperative, says the requested rate increase isn’t tied to a project or upgrade but is needed to offset increased operating costs.

“We’ve not had a rate adjustment since 2007 — that’s the primary driver,” Carter said. He and Dan Hitchcock, VP of member services and marketing, answered some questions about the proposed increase via a phone interview and others through email.

Carter said Inter-County must “continue to invest in our facilities and technologies to ensure safe, reliable electric service in order to support its 26,000 members across 12 Kentucky counties.”

In the later email, the men said, “We must satisfy the requirements of our debt obligations and to reflect the increases in our daily operating costs. Vegetation management costs are increasing rapidly. But it is necessary to keep trees and other vegetation away from power lines in order to minimize and shorten outages, especially during severe weather events. There is increasing competition for workers with the knowledge and skills necessary to build and maintain our electric grid.”

Carter was asked about a requested increase to the “customer charge” rate, which will go from $8.97 to $15.20 per month. He said this rate refers to the charge to maintain their facilities, “just to keep the doors open.” Later via email, the men explained this reflects the monthly charge per meter to assist in paying for the poles, transformers, meters and maintenance.

According to information from Inter-County, an average household — using roughly 1,085 kilowatts — would pay $108.48 under the current rates; that includes the $8.97 customer charge and .09171 cents per kilowatt. After the proposed increase, the same energy usage would cost $117.81 — including the higher $15.20 customer charge and a kilowatt rate of .09457 cents.

“We did a cost of service study, as required by the Public Service Commission,” Carter said. The residential rate increase is estimated at 8.6 percent. Carter said it works out to about 31 cents per day in added cost.

When asked if the rate-increase request would require a public hearing, Carter said, “This goes through the entire Public Service Commission steps; there may not be a public hearing.”

But Carter couldn’t say for sure — that’s up to the commission.

“We don’t anticipate this coming about until November of this year,” he said.

Andrew Melnykovych, public information officer for the PSC, said he would be surprised if a hearing wasn’t held. Public comments “are accepted until the case record is closed sometime after the hearing,” he said.

The PSC has 10 months from the time of Inter-County’s filing to complete a review of the case.

Carter and Hitchcock were asked if they anticipate any increase in cut-offs after the rate increase goes through, which could be during the start of winter in Kentucky.

“We still offer arrangements to help our members pay their bills over time. We offer a plethora of energy-efficient programs, which helps them lower their electric bill,” Hitchcock said.

“They can find out about any of these through our website, and we advertise it heavily in our magazine, Kentucky Living,” Carter said.

Hitchcock said customers may go online or come to the office if they need payment program information, or want to look into steps of how to be more energy efficient.

“We have plenty of information in the office when they come in to pay their bill. They can request information on anything we have to offer,” Hitchcock said.

Carter said Inter-County also works hand-in-hand with Community Action on LIHEAP, a Low Income Home Energy Assistance Program.

“We assist our members in setting a payment plan for them to get back on track during the winter/summer months when electricity increases because of the hot/cold temperatures. We also offer levelized billing that allows the member to pay an average amount each month based on their usage history. Inter-County Energy has several energy-efficiency programs in place to further assist our members to become more energy efficient and live comfortably,” Carter and Hitchcock wrote in an email.

Troy Roberts, executive director of Blue Grass Community Action Partnership’s regional office in Frankfort, said in order to get help from LIHEAP, a household must be at risk of being disconnected.

“The program is set up so LIHEAP pays the minimum amount to prevent the disconnect, up to a maximum of $400. All of our partnering utility companies work with the client to establish a payment plan for the remaining balance that is owed,” Roberts said.  

Hitchcock said the company doesn’t take the proposed rate increase lightly but has to take the necessary steps to provide the best possible service.

“We do understand that many of our members are very sensitive to any increase in cost, and concerned about it,” Hitchcock said.