Kentucky Power Company engages in the generation, purchase, sale, transmission, and distribution of electric power in the United States. It provides electricity to approximately 1, 70,000 retail customers in 20 eastern Kentucky counties. The company also sells electricity at wholesale to municipalities. The company was founded in 1919 and is headquartered in Frankfort, Kentucky. Kentucky Power Company operates as a subsidiary of American Electric Power Company, Inc.
PO Box 5190
Frankfort, KY 40602
Founded in 1919
Kentucky Power Appeals PSC Order to Discontinue Collection of $54 Million in Fuel Costs
Feb 25 15
Kentucky Power Co. is appealing a decision by the Kentucky Public Service Commission that ordered the utility to cease collecting $54 million in fuel cost fees from its customers. The Jan. 22 order directed the utility to pay back $13 million in fuel costs already collected during the first four months of 2014. The PSC said it would deal with charges collected in the latter months of 2014 in future fuel cost review proceedings. The American Electric Power Co. Inc. subsidiary was expected to refund the $13 million on customer bills in February through May by applying credits to customers' bills. The utility was also directed to forgo the collection of the remaining $41 million in fuel costs. Kentucky Power filed the appeal in Franklin County, Ky., Circuit Court on Feb. 18 seeking to reverse the commission's order and correct what Kentucky Power President and COO Greg Pauley, in a Feb. 23 news release, called "disappointing language." The PSC, in its January order, criticized Kentucky Power for providing misleading or incomplete information regarding an earlier case involving the utility's purchase of a 50% interest in the 1,560-MW coal-fired Mitchell power plant in Marshall County, W.Va., from a corporate affiliate to replace the 800-MW output of unit 2 at the Big Sandy generating unit in Lawrence County, Ky., which is to be retired. In evidence submitted in the Mitchell case, Kentucky Power said the acquisition of the plant would reduce the company's annual fuel costs by $16.75 million, with those saving passed on to ratepayers. However, the company did not disclose that operating the surplus generating capacity - during the period in which Kentucky Power operates the Mitchell plant and Big Sandy 2, which is due to be shut down by the end of May - would impose an additional $38.25 million in annual fuel costs on Kentucky Power's customers due to the method the company uses to calculate those costs, the PSC contended. Kentucky Power originally sought the fuel cost charges while it was running the Mitchell power plant and Big Sandy unit 2 at the same time, according to the news release. Retiring Big Sandy unit 2 at the end of May will eliminate the need to collect the fees. Kentucky Power wrapped up the purchase of the Mitchell plant earlier in February 2015, which was acquired to meet customer needs and pending U.S. EPA Clean Power Plan regulations. Kentucky Power, in its news release, explained that the PSC allows utilities in the state to pass fuel costs on to its customers on a dollar-for-dollar basis, reflecting actual fuel costs. The utility does not earn a profit from the fuel costs.