FRANKFORT — Kentucky Power is asking the state Public Service Commission to withdraw its June request for a base rate increase to recover costs associated with its purchase of half interest in a West Virginia power plant.
The request to withdraw the earlier request does not affect a separate PSC order that allows KPC to buy 50 percent interest in the Moundsville, W.Va., Mitchell Power Plant owned by Ohio Power, which, like KPC, is a subsidiary of American Electric Power. However that October ruling may be appealed in court.
Prior to PSC approval of the final Mitchell Plant agreement, KPC had requested a $114 million rate increase, which would have raised customer rates by about 23 percent.
But when the PSC approved a stipulated agreement worked out by KPC and two intervening groups — the Sierra Club and the Kentucky Industrial Utility Customers — to transfer the Mitchell assets to KPC on Oct. 14, the company agreed to withdraw the earlier request.
Under the final agreement, KPC will freeze current base rates until May 2015, but is allowed to recover part of the costs of acquiring the Mitchell assets through an Asset Transfer Rider applied to customers’ bills beginning in January.
That will increase the average residential customer’s monthly bill by about 5 percent, or around $6.70 more a month.
“Withdrawing this case is something we committed to do when we accepted the stipulated settlement agreement back in October,” said Ranie Wohnhas, managing director for regulatory and finance for KPC. “Now that all the commission-related appeals have been exhausted, the company filed its request to withdraw the base rate case on Nov. 19.”
Kentucky Attorney General Jack Conway had asked the PSC to reconsider its ruling in the Big Sandy case, but the PSC denied his request in an order it issued last week. Conway spokeswoman Allison Gardner Martin said an appeal “is likely.”