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The Kentucky Public Service Commission (PSC) has accepted a proposed settlement in a rate adjustment case filed by Owen Electric Cooperative Inc.
Owen Electric reached a settlement with the Kentucky Office of Attorney General that grants a $4 million increase in annual revenue, which is about $74,000 less than it’s original request and $1.07 million less than subsequent revised request. Owen Electric’s annual revenue will increase by about 2.7 percent.
Typical residential customers will see an increase of about $5 in their monthly bills, although the amount will vary based on individual electric use.
Under the settlement, the added revenue will come through an increase in the usage charge for each kilowatt-hour of electricity. A kilowatt-hour is the amount of electricity used by a 100-watt light bulb in 10 hours.
The settlement leaves in place a rate restructuring that the PSC approved for Owen Electric in Feb. 2012. The restructuring was designed to be revenue neutral, meaning that it would neither increase nor decrease Owen Electric’s total revenue.
Owen Electric’s rate restructuring increased monthly customer charges and decreased the rate charged for electric usage. It did so in three steps, beginning March 2012.
The monthly customer charge for residential and farm customers already was set to increase on Sept. 1 from the current $14.20 to $17.10, with a corresponding decrease in the charge per kilowatt-hour. Under the settlement, the charge per –kilowatt now will increase as well.
A further shift of revenue to the monthly customer charge from the usage charge is scheduled to take effect on March 1, 2015.
Owen Electric has about 57,500 customers in nine counties in north-central Kentucky. It is one of 16 cooperatives that own and purchase power from the East Kentucky Power Cooperative Inc.
Owen Electric has filed its application got a rate adjustment on March 12, 2013, saying it needed an additional $4.07 million in revenue to maintain its financial integrity and comply with its loan agreements. The utility subsequently increased its request to $5.07 million.