Staff report
Half-way through the session of the General Assembly, the first bill to pass both chambers is headed to the governor’s desk. There is no word yet on whether the Governor will sign it.
Senate Bill 172, sponsored by Sen. Phillip Wheeler, R-Pikeville, passed the Kentucky House of Representatives unanimously yesterday.
Carried in the House by Rep. Patrick Flannery, R-Olive Hill, SB 172 addresses sudden spikes in electric bills caused by sharp increases in fuel costs, particularly during extreme weather events.
The one-page bill provides the Kentucky Public Service Commission with the authority, upon request from a utility provider, to spread fuel cost recovery over several months rather than allowing a large, one-time surcharge to hit consumers all at once.
Under current law, when utilities face higher fuel expenses, often driven by volatility in natural gas markets, those costs are recovered through a fuel adjustment surcharge added to monthly electric bills.
“This is a simple, consumer-friendly bill that gives the Public Service Commission a tool to address the peaks and valleys we’re seeing in fuel adjustment surcharges,” Wheeler said. “When someone opens their electric bill and sees a large, unexpected increase, that creates real hardship, especially for families on fixed incomes. This allows those costs to be spread out in a more manageable way.”
Wheeler noted that recent cold weather caused natural gas prices to spike dramatically, in some cases doubling or tripling. In extreme instances, prices rose from $5 or $6 per MCF to as high as $80 to $150 per MCF, costs that are ultimately passed on to consumers.
“I want to be clear: this is not a silver bullet,” Wheeler said. “Energy affordability is a serious challenge nationwide. Over the past decade and a half, federal energy policies have reduced reliable baseload generation and tightened supply while demand continues to increase. Kentucky once enjoyed some of the lowest power rates in the country, driven largely by coal. As that generation has declined, we’ve seen more volatility. This bill won’t solve everything, but it is a responsible step we can take at the state level to help protect our constituents.”
“Senate Bill 172 passed the Senate 38-0 and is very consumer friendly,” Flannery said. “When extreme weather drives energy prices up, sometimes double or triple, that creates significant increases on the next month’s bill. This legislation allows the Public Service Commission, when requested by the provider, to spread that cost out over several months, making it more affordable for the consumer.”
The measure moved quickly as lawmakers responded to mounting concerns from constituents statewide about higher and more volatile electric bills.
The bill has an emergency clause, meaning it would go into effect immediately on the Governor’s signature.
Sheri Mahan, a spokesperson for the Public Service Commission, told Kentucky Lantern reporter Liam Niemeyer, that the regulator already has the discretion to extend the timeframe over when the costs of fuel are collected through the fuel adjustment clause. She said the commission has not be consulted on any bills filed by the legislature that involve the regulator.
Ky.gov shows that 671 bills have been filed in the House and 210 bills have been file in the Senate. The current session convened on January 6 and is scheduled to adjourn on April 15. February 18th marked the 30th day of the 60-day session. This does not include the 10 “Veto” days before the final two days of the General Assembly.
The last day for filing new Senate bills is March 2 and the last day for filing new House bills is March 4.