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Kentucky Utility Regulators Block Low-Income Advocacy Groups From Rate Case

Photographer: Dwight Burdette

Kentucky public utility regulators have denied groups advocating for low-income families from participating in the latest Louisville Gas & Electric rate case while at the same time granting Walmart, Kroger and the U.S. Department of Defense a seat at the table.

It's the first time in more than a decade low-income and affordable housing advocates have been excluded from participating in a rate case, said Tom FitzGerald, an attorney representing two groups involved.

Advocacy groups say the commission has created a double standard. The decision gives preferential treatment to large businesses while excluding the interests of the most vulnerable, said Cathy Hinko, executive director of the Metropolitan Housing Coalition.

“By allowing Walmart and Kroger in, they were already allowing subgroups of consumers who actually only represent themselves; [they] don’t even represent all industry or all places where people shop,” Hinko said.

Louisville Gas & Electric is asking the Kentucky Public Service Commission to raise rates for nearly 1.3 million residential gas and electric customers to support system-wide improvements.

LG&E generally requests some sort of a rate review every few years. The Public Service Commission chooses to approve rate hikes only after weighing the interests of rate payers with the needs of utilities.

Ordinarily, groups like the Metropolitan Housing Coalition, the Association of Community Ministries and the Sierra Club intervene to protect the interests of vulnerable communities. Once they’re a part of the case, they can request more information from utilities, present testimony and cross-examine witnesses.

“We want to know is the increase reasonable, what it is going to be used for and how is it going to be paid for? Let me tell you, that is the big question: how does it get paid for?" Hinko said.

The Public Service Commission excluded the groups, arguing that the rights of low-income customers are adequately addressed by the Attorney General’s Office — another intervener in the case.

The commission cited an October article in BereaOnline.com where Attorney General Andy Beshear said “Kentucky families in electricity … cases before the [Commission], while fighting to support vital programs that assist low-income families.”

But even Attorney General Andy Beshear disagrees with the commission's decision, he said.

“My office believes that any process should be inclusive and transparent as possible, and that the PSC would be better served by hearing all voices," Beshear said in a statement.

The commission denied requests from the Metropolitan Housing Coalition and the Association of Community Ministries at 4 p.m. on the last day before a deadline when the groups could begin requesting information from LG&E, according to a court filing.

The Metropolitan Housing Coalition and the Association of Community Ministries filed a temporary restraining order on Tuesday arguing the decision was arbitrary:
“Rather than resting on a logically consistent or coherent base, the Commission’s actions, taken in the context of the other motions for leave to intervene filed and approved in this case, speaks volumes regarding the apparent disregard of the Commission for those advocating for our Commonwealth’s most vulnerable ratepayers, relative to Commission interest in the participation of certain commercial, industrial, and institutional interests.”
The groups are now seeking a temporary injunction against the commission. The Attorney General's Office will join them in arguing the case before the Franklin Circuit Court on Friday.

The Public Service Commission declined to comment on the case because of the lawsuit.

When asked why the Attorney General's Office could represent low-income families, but not Walmart and Kroger, spokesman Andrew Melnykovych said:

"If you look at the orders, the order regarding Kroger or Walmart or any of the other interveners, there is no reference to any statements by the attorney general that he is going to specifically represent those interests."

If the rate hike passes, typical residential customers could see monthly electricity bills increase about $4.23 on average while average gas rates would rise about $4.93 per month, said Natasha Collins, LG&E spokeswoman.

Ryan Van Velzer is WFPL's Energy and Environment Reporter. Email Ryan at rvanvelzer@lpm.org.

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