FRANKFORT, Ky. — The Kentucky Public Service Commission has approved a modified rate increase for Kentucky Power customers, scaling back the company’s original request of nearly 15 percent, but still raising monthly bills for most residential users by more than 5 percent.
In a final order issued Friday in Case No. 2025-00257, the PSC said the average residential customer using 1,208 kilowatt-hours per month will see a first-year increase of $10.76. That brings the typical monthly bill to $194.13, up from $183.37 — an increase of about 5.87 percent.
After the first year, bills will rise an additional 0.76 percent.
Kentucky Power had originally sought a much larger increase. Under its initial proposal, the average residential customer would have seen bills rise by $27.30 per month — or roughly 14.6 percent — pushing the average bill to $210.67.
The commission also approved a new two-tiered rate structure for residential customers. Under the new design, customers will pay $0.156321 per kilowatt-hour for the first 600 kWh used each month and $0.117555 for usage above 600 kWh. The basic monthly customer charge will increase to $38 for higher-usage customers, compared to $24 under the previous structure. Regulators said the change is intended to level out bills and address high usage costs.
In addition, the PSC ordered an independent management audit of Kentucky Power to review its operations, decision-making processes and its relationship with parent company American Electric Power. The goal, regulators said, is to identify efficiencies that could benefit customers, after questions were raised about how and when decisions are made at the company. The PSC’s order says Kentucky Power President and CEO Cynthia Wiseman “was unable to clarify in some circumstances whether Kentucky Power or AEP maintained control over certain decision-making authority and processes, did not know how policies were created or changed, or was unaware of significant developments affecting AEP affiliates.”
PSC Chair Angie Hatton said electricity rates have become a pressing issue statewide, particularly in Kentucky Power’s territory, where the company has lost about 12,000 residential customers over the past 14 years and seen industrial power consumption decline by 38 percent. That shift has spread fixed costs among fewer customers, contributing to higher rates.
“We heard emotional pleas at our public comment hearings from ratepayers,” Hatton said. “They are angry and scared of the additional financial hardship caused by any potential increase. The PSC must balance the interests of fair rates for all customers with the realities of the cost of providing reliable electric service and issue a decision based on the evidence presented and within the laws that govern rates.”
The commission ultimately authorized a total annual revenue increase of $55 million — about $40.5 million less than the nearly $95.6 million the company originally requested.
