March 4, 2014

Energy bills will see $6 hike

Jackson Energy approved for rate increase

By Nita Johnson
Staff Writer

LAUREL COUNTY, Ky. — The thoughts of spring — and lower electric bills — were thwarted for many Laurel residents after the announcement of a rate hike by Jackson Energy on Thursday.

The Public Service Commission approved the increase that will cost customers $2 extra per month for their basic rate fees. Jackson Energy submitted a proposal to increase its annual revenue by $4.11 million, or 4.6 percent. The PSC agreed the increase is necessary because of declining revenues.

The increase went into effect on March 1 although Karen Combs with the Jackson Energy Co-Op said the increase will not be reflected on customers’ bills until April. The rate increase will come in three separate stages of $2 each, beginning this month and going up another $2 in September. The final increase is set for September 2015.

The rate increase will not affect the kilowatt hour usage, but will rather be on the monthly customer charge, which was previously $10.44. Jackson Energy customers will see a basic charge of $12.44 on their next bill.

“We felt a cost adjustment that would not impact electric usage, which is often determined by weather, was the best solution for Jackson Energy and our members,” said Carol Wright, CEO and president of Jackson Energy. “This will result in just over a five-percent increase in revenue for Jackson Energy, and our members will know in advance exactly how much the charge will be each month on the bill.”

The revenue increase is the first for Jackson Energy since 2008.

Jackson Energy’s finances began declining in 2012 as a result of increasing operations costs. Final financial figures were not available until early 2013 for management to consider the need for additional revenue. Jackson Energy then had to perform an extensive cost of service survey before filing with the Kentucky Public Service Commission — a request that was filed in August of last year. After some deficiencies in the original application were corrected, the PSC accepted the proposal on Sept. 6 and the issue was the subject of a PSC hearing on Jan. 28.

Although the rate increase did not address Jackson Energy’s existing demand-side management (DSM) and energy efficient programs, the PSC urged the electric co-op to encourage customer participation and expand those programs in the future.

“We have always had an aggressive energy conservation and rebate program available for our co-op members,” Wright said. “We offer rebates that help members install more insulation, assist with upgrading to a more energy efficient heating system and offer programs that help increase the efficiency of their current heating system.”

Jackson Energy has approximately 51,240 customers in Breathitt, Clay, Estill, Laurel, Garrard, Jackson, Lee, Leslie, Madison, Owsley, Powell, Pulaski, Rockcastle and Wolfe counties in east-central Kentucky. It is one of 16 cooperatives that own and purchase power from the East Kentucky Power Cooperative Inc.

The PSC is an independent agency attached for administrative purposes to the Energy and Environment Cabinet. It regulates more than 1,500 gas, water, sewer, electric and telecommunication utilities operating in Kentucky and has approximately 90 employees.

The PSC’s order, other documents in the case and a video of the hearing are available on the PSC website, {}. The case number is 2013-00219.