The Kentucky Public Service Commission announced this week it is moving forward with a plan to streamline the rate adjustment process for rural electric cooperatives such as Paintsville’s Big Sandy Rural Electric Cooperative Corporation.
The move comes because rural co-op rates are largely based on passing through transmission and generation costs that have already been established in other cases.
“The issues presented in rate cases filed by distribution cooperatives are not as complicated, nor do they have the same impacts, as those presented in rate cases filed by vertically integrated investor-owned utilities,” the PSC said.
“This effort is very much in keeping with (Gov.) Matt Bevin’s initiative to reduce unneeded regulatory red tape,” said PSC Chairman Michael Schmitt in a statement. “It can benefit the cooperatives and their member ratepayers by reducing the cost of filing rate adjustments and also reduce the amount of time and effort the PSC must expend on these relatively straightforward rate cases.”
Big Sandy RECC assistant general manager Bruce Davis, who will be taking over as president and manager on January 1, said the decision should be a welcome change for his customers.
“It will simplify things, and most importantly for us, we’re always trying to put pressure on the PSC to try to help us save money for our consumers,” Davis said.
Davis said changes at the PSC to simplify and cut red tape should translate to lower costs at every step in the chain.
“This is going to help us, and save us money in rate cases. It’s going to shorten the amount of time and shorten the amount of activity and labor that we have to put forth, and that equals savings in money,” Davis said. “We feel like it’s a great idea. We’re all for it, because it’s going to simplify things for us, and in turn, save our consumers money.”
A statement from the PSC said its current rate case process can take as long as 10 months, but the streamlined process would take no more than 75 days, so long as the rate changes meet certain criteria. Those criteria include such stipulations as the rate increases no more than four percent, and no more than 0.75 percent for each year since the cooperative’s most recent rate adjustment, and only for increases in the operating costs of the cooperative itself.