, Corbin, KY

November 13, 2013

CUC rate increases approved

Rates go into effect Dec. 1, will show up on January bill, Corbin, KY

CORBIN — By Jeff Noble / Staff Writer

A rate increase on electric, water and sewer rates for Corbin City Utilities customers was approved Tuesday by the Corbin Utilities Commission (CUC).

The action was taken during the board’s regular meeting and was unanimously approved.

The new rate changes will go into effect Dec. 1, and will show up on the Jan. 1, 2014 billing. The January bill is due by Jan. 15, 2014, with a 10-percent penalty added if the bill is not paid on or before the 15th of the month.

Officials with the city utilities said the rate increase would cover the increased costs from Kentucky Utilities Company (KU), and pay for needed CUC projects.  

KU passed along a five-percent increase to CUC customers that began in August.

Based in Lexington, KU provides wholesale electricity to Corbin City Utilities.

The changes came after the financial analyses for the rates were reviewed by the consulting firm of Leidos which is based in Hendersonville, Tenn. The firm reported earlier on the revenue requirements and recommended the rates that were passed Tuesday.

For electricity, the CUC adjusted their Residential (RS-1) rate from the current customer charge of $4 to the proposed $10. It increases the energy charge (all kilowatt hours) to $0.0729.

For Small General Service (SGS-1), the rate increases to a customer charge of  $20, with an energy charge of $0.0769 for the first 400 kilowatt hours. As for New Large General Service (New LGS), the rate increases to a customer charge of $50, with an energy charge of $0.0480 for all kilowatt hours, and an $8 demand charge for over 25 kilowatts.

Total annual revenue from the electric rate increase is expected to bring an additional $269,355 to the CUC.

For water rates, the CUC will adjust their Inside City (IWS-1) rate for a service charge for 5/8”-3/4” lines from the old rate of $2.50 to a new rate of $4.50. For Outside City Rural Retail (RWS-1) customers and Outside City Retail (OWS-1) customers with 5/8”-3/4” lines, the service charge goes up to $9.00.

Based on current customers and consumption, the water rate increases would bring the CUC an additional $242,928 in total annual revenue.

For sewer rates, the city utility will adjust their Inside City Residential and Commercial (ISS-1) rate for a service charge from the current $2.69 to the new $6. For Outside City Residential and Commercial (OSS01) users, the service charge goes up to $12. Inside City Industrial (ISS-2) customers would see an increase in the service charge, with the rate up to $139. Outside City Industrial (OSS-2) users would see the service charge rate go to $278.81.

The CUC said increases in the sewer rates is forecast to bring them an estimated $230,502 in revenue based on current consumption and customers.

Tuesday’s vote came after no one attended a public hearing on the rate increases held last Thursday at 6 p.m. at Corbin City Hall. That meeting was called by the CUC to hear comments and suggestions about the increases from customers and residents.

The CUC is also joining a group of 12 municipal utility companies in the state that buys power from KU to do a study on alternate power supply options. General Manager Ron Herd said in his report the study would enable the group of 12 to determine whether to stay with KU, or to give notice and acquire new power supply contracts.

He added the possible study was brought on by KU raising rates to CUC and other municipal utilities.

“We’re not necessarily leaving KU, we’re looking for a better way,” said CUC Board Chairman Terry Joe Martin after the board approved joining the other municipals in the study.

Herd noted the major items of concern with the changes include a 10-plus year notice of termination, new liquidity requirements, a rate true-up, rate of return on equity, or ROE, MISO (a regional transmission organization) exit fee recovery, and socialization of uncollectible municipal debts.

He mentioned the cost for the 12 municipal companies to get a contract would be around $250,000, with the CUC’s cost coming to five percent, or $12,500.

The Federal Energy Regulatory Commission (FERC) will make an initial ruling on the filing next Friday, Nov. 22.

The ruling came after KU filed with FERC on Sept. 23 for changes to the power supply contract with the CUC and the other 11 municipal utilities using their power in Kentucky.

Among other actions, approval was given to Akins Contracting of Corbin as the low bidder on water line relocations on Ky. 3437 in Knox County. Two bids were received, with Akins’ bid of $20,615 the lowest for the relocatons — part of a state Department of Highways bridge replacement project on the road. The CUC will be reimbursed by the state for the costs.

Board members also approved the new rates for employee’s health insurance with Anthem Blue Cross-Blue Shield of Kentucky for 2014. The CUC will pay a 10-percent increase for the period from Dec. 1 of this year to Nov. 30, 2014, with the coverage remaining the same.

Approval was also given for the utility to write an engagement letter, authorizing the accounting firm of Marr, Miller & Myers, PSC to perform the utility’s yearly audit for the fiscal year ending Dec. 31.

Martin said, “In my opinion, they’ve done a very good job for several years. We just have to approve the engagement letter as a formality.”

The session ended with Herd reminding the board the employee’s Christmas Dinner will be Friday, Dec. 6 at the Chamber of Commerce Office on Depot Street, starting at 6 p.m.