Care About Your Energy Rates? Get To Know the Kentucky Public Service Commission.

"No one really learns in school that you should comment on PSC cases because that can impact...your energy bill."

A few days ago, an elderly neighbor stopped you in the freezer aisle to mention that she’s struggling with how much higher her energy bill is this summer—despite trying every energy-saving trick in the book. An old friend whispered at a PTA meeting last month that she was hanging on by a thread, being forced to choose between keeping her gas tank full and keeping the lights on. It seems like everyone in your town is being impacted by higher energy rates with potentially devastating consequences…but what is there to do?

When energy costs are getting out of hand in your community, most people feel like it’s a helpless situation: nowhere to go (except maybe Facebook to complain) and no one willing to look into the ever-rising costs. But that’s only because we’re not taught in school (or, at least, I wasn’t) about the state administrative body that’s tasked with overseeing the fair regulation of Kentucky’s energy rates: the Public Service Commission.

In their own words, the Kentucky Public Service Commission’s job is to “foster the provision of safe and reliable service at a reasonable price to the customers of jurisdictional utilities” but, put in simpler terms, the PSC’s primary role is to hold the 1,100-plus monopoly utilities across the state accountable to the statutes and regulations that govern them. If you care about keeping your energy bills “fair, just and reasonable” it’s important to not only understand how the PSC operates (and that it exists) but make your voice heard about local energy issues. Yes, they want to hear directly from you.

Below, Rachel Norton, an engineer, energy specialist with Mountain Association, and member of Kentuckians for Energy Democracy—a collaborative with a mission to “increase transparency, participation, and equity in the Public Service Commission by educating and engaging Kentuckians”—walks us through how the Public Service Commission operates and the ongoing struggle to keep energy rates in check for communities across the state.

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Sarah Baird: Give us the Cliff Notes version: What is the Public Service Commission and how does it impact Kentuckians?

Rachel Norton: The Public Service Commission [PSC] is the only government entity that protects the consumers of electricity, water and gas from the utility companies, that are monopolies, providing those services. Most states have an entity that’s very similar, but they’re all their own unique beast. In Kentucky, the PSC is typically comprised of three commissioners. Right now, though, we just have one commissioner because we’re waiting on more appointments.

The PSC is one of those things that’s wildly important and nobody grows up learning about it. No one really learns in school that you should comment on Public Service Commission cases because that can impact how much you pay on your energy bill. A lot of people don’t even know that they can comment. The PSC has a lot of power and authority. They’re the ones that can really speak for us, so it’s important to have them close.

SB: What does term “rate setting” mean?

RN: Our Public Service Commission wants to make sure rates they set for utilities are fair, just and reasonable. That's their mission, essentially: deciding how much energy will cost for everyday people and businesses. There’s a lot of math involved and different ways that it can be done—it can get really in the weeds—but at the end of the day, they get a lot of input from utility companies on what rates should look like and not nearly enough from consumers.

Based on whatever inputs they get from consumers like ourselves and utility companies, they set the rate and say, “OK, with the inputs that we’re gotten, this is how much your energy is going to cost.” That’s why it's so important, if you have complaints or opinions about your energy rates, you should absolutely share it with the commissioners.

SB: What are the biggest challenges faced by the PSC here in Kentucky?

RN: They face a lot of challenges currently, particularly because there’s only one public service commissioner. Even before they were down to a single commissioner, they said that capacity is an issue for them, and they felt that they were understaffed and under-resourced—so that’s been a challenging situation. Part of the reason that has happened is because the legislature cut their funding and then passed over appointees. There were actually people put in those [commissioner] seats and the legislature decided not to confirm them. So, now our Public Service Commission is just one person, hoping to represent all of us.

The PSC has to absorb and organize all of this data and information from utility companies and from people. A lot of the information they get is highly technical and nuanced, so just the amount of time it takes to really dive in and make decisions they deem to be fair, just and reasonable to a consumer, based on all of this data, is a lot on its own. Then also add in climate change being a huge issue, rising energy costs, and the energy transition away from coal. There are a lot of things that they’re taking into account right now. It’s a historic moment. It’s a lot.

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SB: How has the PSC and its role changed over the past decade, and how do you see it changing going forward as we hopefully hasten the transition away from coal and have more renewables in play?

RN: Generally speaking, they’ve really retained that intermediary role between consumers and utility companies for a long time. They also have the ability to change a lot of things. It’s just a matter of the actual inputs that they get. They’re quasi-judicial, so they can only work off of the evidence they are given—especially when it comes to rate setting and cases like that. They have always encouraged us to submit comments and be involved, because that gives them more evidence that they can use to support consumers and balance that with utilities. That's been a constant for them.

But I think there are a lot of ways that we could have a PSC that works better for us. There are some things that are low-hanging fruit, like making sure public comment hearings are scheduled early and in times or locations where people can attend. Also, improving their website so people can easily access information and figure out when they can engage with their comments, whether it’s in person or just commenting online.

Then there are other things we would really like to see, like group listening sessions. The Public Service Commission could go out and hear from the public generally: How’s it going with your energy bills? What can we be doing better? How is it impacting you? There are a lot of Kentuckians who are making really tough decisions about their needs if they’ve been experiencing a high energy bill for several months and don't have programs to turn to for support. They’re having to make decisions like: How much money can we spend on the energy bill versus medication, versus healthy food, versus baby formula that is now much more expensive? Electricity is necessary for survival. I think those listening sessions would be really important, especially to be put into evidence for these cases.

We also think that the PSC could become an entity that leads with a real vision. Because they’re understaffed and under-resourced, it’s led to them being in a bit of a reactionary state at times, and just not having the capacity to create a vision that they can use to lead and make things better proactively. I think there's a lot of opportunity.

SB: What are some of the hurdles to making your voice heard with the PSC, and how can people most effectively comment about their current energy situation?

RN: I would definitely encourage folks to visit our website. We have a place where they can send comment to the PSC that’s not a form letter—you just put in your information. We have different pieces that they can read through to become more informed. You can also call them or email the PSC directly on whatever issue you see fit.

If you’ve never reported an issue to the PSC and are unsure about what you can or should report, I would say definitely high bills, especially if you’re somebody who has found that you have high bills and you’ve tried to change things and there’s nothing that’s working. Also, if you just tend to live in a community where high energy bills are seriously impacting a lot of your neighbors and yourself.

And I know times have been really hard, so this might not feel accessible to everyone, but if there’s something that’s going really well [with your energy provider] that you would like to see available to more people, that’s really important to let them know about, too.

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SB: In your experience, are rural customers reaching out to the PSC with different energy issues than more urban/suburban customers?
 
RN: Across the board, people aren't saying enough, period. I would say, in general, the PSC doesn't hear a whole lot unless there is a specific case that comes up.

Often what happens is that people become aware of the PSC because of these specific cases where a utility company wants to increase their rate. That can mean a lot of different things, whether it’s the actual amount that you’re paying for the energy you use on a regular basis, or sometimes it’s about the monthly fee that everybody pays for having an energy meter on their house.

Other times, it’s about how solar energy is valued and priced separately from your energy bill, and how much you can get credited back for that. There are all kinds of nuanced things that can come up for a rate case. The usual situation is a utility company would like to increase rates, so they write up a reason why they’re justifying that, and the PSC reviews it.

I would say, generally speaking in our state, there are high levels of what I would call “energy burden” than other places. People are paying a much higher percentage for energy in our rural areas, and high energy bills are statistically more impactful in rural areas to a household bottom line.

SB: Even though the PSC is technically not a political entity, how do politics impact the PSC?

RN: They’re quasi-judicial, meaning as an entity, everything that they do has to be an evidence-based decision. As an engineer, I really thought that getting into the energy industry would be not very political, but it’s one of those things that’s so holistic. Energy availability touches everyone's lives in really different and meaningful ways. People have a lot of opinions and ideas about what we could be doing, and the energy landscape, like so many things, becomes inherently political in how people talk about it. I think it’s really important that people know how much power these commissioners have, and the opportunity they have to give public comment, because the impacts are big.

The PSC is a nonpartisan body, so they have to consider all evidence presented to them, but they can’t go out and be like, “Hey, what's your story?” about a case. They have to have people show up with information for them. That’s why it’s so important for consumers to comment, because that’s considered evidence of the customer experience and what is important to the customer. That's part of the agreement in having a monopoly utility and it being your only option for electricity. The Public Service Commissioners want to advocate on your behalf, and make sure you feel that what you're getting is fair, just and reasonable.

SB: What's the biggest public misconception about the PSC?

RN: Most people don’t know that the PSC exists, that they exist to protect you, and that they have a lot of power to do that. Utilities aren't going to change unless they’re forced to, and they’re going to continue to ask for rate increases. I mean, barring some very extreme change to our energy market, I would say that they will continue to ask for increases in rates, and having people stand up and say, “We need something that works better for all of us,” is hugely important. Yeah, probably hilariously, though, the biggest misconception about the PSC is that people don't know they exist.

This interview has been lightly edited and condensed.

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It’s Public Service Commission Week on The Goldenrod! We’ll be back tomorrow with a first-hand look into the public commenting process and offer up some advice for making the most effective energy-related comments to the PSC. If you’d like to start digging in already, this guide from Kentuckians for Energy Democracy is a great jumping off point.

In the meantime, as we await the Supreme Court’s ruling on West Virginia vs. EPA, might I suggest brushing up on how this case could have a massive impact on climate and energy issues in Kentucky…and place the PSC in a position of even greater regulatory power?