Kentucky Power Seeks Rehearing on Rates, Citing Financial Impact Concerns

Gwen Johnson of Jackhorn put it plainly when Kentucky Power's rate proposals came before state regulators. "Sometimes I think they're just trying to run us out of here," she said. Her frustration now has a new chapter.

Kentucky Power filed a petition with the Kentucky Public Service Commission on March 26, asking the commission to reconsider its Feb. 28 decision on customer rates. The company argued the PSC's order imposes "significant negative effects" on its financial health, even though the rate increase it received amounts to about half of what it originally sought. The sticking point: the approved settlement could require a $17 million write-off in 2026.

The increase already in effect raises the average residential customer's bill by nearly 6% this year, with another 1% set to follow in 2027. The monthly base charge climbed from $24 to $38. The per-kilowatt-hour rate is now $0.156321 for the first 600 kWh and $0.117555 for usage above that. A home drawing 1,000 kWh a month, typical for many eastern Kentucky households, now owes roughly $179 before additional riders.

Kentucky Power spokeswoman Sarah Lynch said the remedy the company seeks would not push rates beyond what the PSC already approved. She said up to $40 million in deferred tax credits could resolve the financial dispute, and if the PSC accepts that approach, it would also bar another rate-increase filing until at least August 2028.

The commission scheduled an informal conference for April 1 to discuss the petition. From there, the PSC can grant rehearing in full or in part, potentially revising its prior order, or deny the request, leaving Kentucky Power to weigh an appeal in state court. Current bills remain governed by the existing tariff regardless.

About 162,511 customers across Kentucky Power's 20-county eastern Kentucky territory are watching the outcome, including households, schools, and healthcare facilities throughout Perry County. The service territory has lost more than 12,000 residential customers over 14 years, a decline that concentrates fixed utility costs on those who remain.

Public hearings in Hazard and Pikeville drew residents and elected officials urging the PSC to protect lower-income ratepayers. The PSC docket is publicly available at psc.ky.gov, where customers can also submit written comments. Those facing hardship with higher bills can contact Kentucky Power directly at kentuckypower.com or apply for LIHEAP energy assistance through their local community action agency.