“The truth is, families in Eastern Kentucky, who already pay the state’s highest average energy bills, can no longer bear the burden of questionable decisions by Kentucky Power, compounded by a hard-hit regional economy.”
In its most recent rate case, Kentucky Power clarified that population and industrial losses, coupled with the need to increase revenue for investors, relative to its fixed costs, are significant reasons for its proposed 15% industrial rate hike, 14.9% residential rate hike and 13% commercial rate hike.
Annual statistical reports kept by the Kentucky Public Service Commission (PSC) reflect a sad tale. Over 12,000 residential customers have been lost in the past 14 years in Kentucky Power’s 22-county service area in Eastern Kentucky. In 2010, Kentucky Power sold 3.3 billion kilowatt-hours of industrial power. By 2024, that number dropped to 2 billion kilowatt-hours, a 38% loss. No doubt, our region is in trouble.
As of March 2026, the Kentucky Public Service Commission (PSC) approved a rate hike for Kentucky Power, allowing a 6% increase ($10.76/month) starting in March 2026, significantly less than the 14.9% requested. The order requires an independent audit of company management and introduces a two-tier rate structure to help mitigate costs. See chart below.
Most people living in Eastern Kentucky do not need numbers on a chart to tell us that industries once depended on to feed our families have declined or, worse yet, completely evaporated. Coal, steel and power, the bedrocks of our communities and local economies, have gone by the wayside.
Kentucky Power itself was a major player in declining power and coal jobs when it chose to decommission its Big Sandy 2 generating plant in Louisa and invest millions of Eastern Kentucky ratepayer dollars in the coal-burning Mitchell plant located just outside of Moundsville, W. Va., a plant that does not employ Kentucky citizens, pay Kentucky taxes or burn coal mined in Eastern Kentucky.
So here we are, looking for new industries to attract to our area and hoping the industries and businesses we do still have stay. None of this is for the faint of heart. To their credit, economic development teams across the region are aiming to create sustainable growth, foster innovation and improve the quality of life in their communities. Adding another 15% to the industrial electrical rate, which is already one of the highest in the state, is not helpful.
More is needed, much more than just decently priced industrial electrical rates to attract and maintain industries and businesses providing good-paying jobs. Infrastructure is key as well.
As they say in the real estate market, our area of Northeast Kentucky has good bones. We have two major waterways, the Big Sandy and the Ohio River; rail services and three major highways that pass through our area: Interstate 64, US 60 and US 23. We are minutes away from the AA Highway, a throughway to Northern Kentucky and the industrial Midwest. We have regional airports nearby. Yet, we have failed to keep up.
Our electrical grid needs work. Extreme weather events due to climate change — hurricanes (the effects of which are felt here in Kentucky), ice storms, floods and tornadoes — are only growing in frequency and intensity. According to Climate Central, 83% of power failures can be attributed to weather changes. We must upgrade or suffer the dire consequences of inaction.
The aging grid in Eastern Kentucky requires a proactive approach to meet the needs of a region seeking a renaissance. Merely trimming trees and clearing brush do not guarantee a resilient power supply. Ratepayers deserve a reliable power supply that only comes from utilizing current technology.
Unfortunately, there has been a major issue at the Mitchell plant requiring significant capital and attention to address. One of Mitchell’s two concrete cooling towers is failing structurally at the over-50-year-old coal-burning plant and needs to be reinforced or replaced.
According to Kentucky PSC records, the options to address the failing tower would be $376 million for a new mechanical draft or $356 million to shorten the tower. Either way means money out of the ratepayers’ pocket for an expense that is not a long-term solution as the Mitchell plant, which Kentucky Power owns half of, is scheduled to be decommissioned in 2040. The money needed to shore up the tower will be in addition to the current proposed rate hike. Kentucky Power has said it is seeking a federal grant to help with this expense; time will tell.
The complicated history Kentucky Power has with its ratepayers continues to lean toward customer rate unsustainability. A correction must take place.
We need companies providing good-paying jobs to locate in the service area to combat population loss, and those companies need fair electrical rates and adequate infrastructure. Ratepayers need Kentucky Power, a monopoly, to manage its operations more effectively. The truth is, families in Eastern Kentucky, who already pay the state’s highest average energy bills, can no longer bear the burden of questionable decisions by Kentucky Power, compounded by a hard-hit regional economy.
PSC meetings on this matter were recently well attended in both Pikeville and Hazard as citizens and elected leaders alike spoke out in unity about the harm further rate hikes will cause.
One more community meeting is on the schedule. The Kentucky PSC will be in Ashland at 5 p.m. Thursday, Jan. 8, at the Ashland Transportation Center to hear from ratepayers.
Editor’s note: This story was originally published here by Kentucky Lantern under a Creative Commons license and also by the permission of the authors. If you share the story on social media, please mention @KYLantern on Twitter and Kentucky Lantern on Facebook. In addition, the Kentucky PSC accepts written comments by mail or email. To submit written comments, include your name, whether you are a Kentucky Power customer, and reference Case No. 2025-00257 in the subject line. Mail comments to: PSC, P.O. Box 615, Frankfort, Kentucky 40602, or email to psc.comment@ky.gov.
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