Clark Energy wants rates hiked

December 01, 2009

Clark Energy Cooperative is asking the Kentucky Public Service Commission to approve a new rate plan that would raise energy bills in Clark County by an average of 9.5 percent.

The cooperative announced in a press release Monday that it submitted an official filing to the Public Service Commission (PSC) on Nov. 18.

Officials estimate that the typical residential consumer can expect to pay approximately $11.57 more each month under the new rate schedule.

If approved, members would not see the rates adjusted on their electric bills until early to mid-summer.

"As we work with our members struggling to pay their bills, we see firsthand some of the pain the unsteady economy has caused." said Clark Energy president and CEO Paul Embs. "Unfortunately, the state of the economy has had a negative effect on all aspects of our daily lives, and it makes it harder to have to tell our members about an impending rate increase."

Clark Energy said it has experienced rising operating costs and decreased revenues because of milder weather patterns and loss or reduction of industrial loads as a result of the faltering economy. The cooperative must maintain certain margins to meet the loan requirements of Rural Utilities Services and Cooperative Finance Corporation and maintain compliance with PSC regulations, officials said.

The approval process is expected to take about six months as the PSC and attorney general review the request, financial documentation, and a cost of service study before making a formal ruling.

The filing marks Clark Energy's first request to raise rates in almost 17 years.

Previous rate increases on members' electric bills were a result of pass-through charges by the cooperative's power supplier, East Kentucky Power Cooperative (EKPC) and were revenue-neutral for Clark Energy.

Officials said the increases were due to rising costs of coal and natural gas to run power plants, purchase power, and meet federal environmental regulations.

Embs said that in the 17 years since its last rate adjustment, cooperative has added more than 8,000 new members as well as more than 538 miles of new power lines that must be operated and maintained.

"I have focused on making Clark Energy operate more efficiently since becoming CEO in 2005," he said. "We have reduced operating costs where possible and done our best to absorb the additional expenses without having to increase our rates. However, these costs have become too much for us to continue to absorb and still meet our financial obligations and continue to provide our members with reliable service."

Headquartered in Winchester, Clark Energy is a not-for-profit, member-owned Touchstone Energy Cooperative that supplies electric energy to more than 26,000 sites in 11 east central Kentucky counties.