Kentucky Chamber, statewide business and environmental groups voice opposition to senate bill 151

  • Frankfort, Ky.. – During a news conference held at the Capitol Rotunda in Frankfort today, the Kentucky Chamber of Commerce, along with the Kentucky Association of Manufacturers, Kentucky Resource Council and the Kentucky Association for Economic Development, voiced opposition to Senate Bill 151. The legislation, which has passed the Kentucky Senate, would expand the Public Service Commission from three to seven members and require they be elected rather than appointed by the governor. SB 151 is based on the theory that electing the members of the PSC would somehow result in lower electric rates.

    "From the perspective of Kentucky’s business community, SB 151 is a solution in search of a problem," Kentucky Chamber President and CEO Dave Adkisson told the media. "The PSC has been doing a good job of holding down rates. The U.S. Energy Information Administration tracks utility costs and reports Kentucky already has among the lowest electric rates in the United States. In fact, the Kentucky PSC notes that the 12 states which elect their public service commissioners all have higher rates than Kentucky."

    Adkisson also made the following statements during the conference:

    • Kentucky has the second lowest electricity rates for industrial customers in the nation according to the U.S. Energy Information Administration.
    • The Kentucky Chamber is steadfast in our opposition to the concept of elected Public Service Commissioners. Our member companies, no matter if it’s an aluminum producer in Western Kentucky or a hardware store on Main Street depends on consistent utility prices to survive. We firmly believe that the election of PSC Officials will not only increase utility rates in Kentucky – but it will bring massive instability and inconsistency in Kentucky’s energy market which will result in net job losses in our state.
    • It is also important to note that elected officials in Kentucky already play a significant role in the PSC. PSC commissioners are currently appointed by the governor and confirmed by the Kentucky Senate. Under state law, the Kentucky Attorney General participates as a consumer advocate in utility rate cases to provide legal representation for the people who pay utility bills. So from our perspective, there are already adequate checks and balances in the current process.
    • Given these facts, it our view that SB 151 will only insert politics into the regulation of utility rates. Decisions on utility rates should be based on the evidence related to the utility’s cost. Elections could create an environment in which PSC commissioners running for re-election could be influenced more by political contributions and out-of-state interests than the evidence in utility cases.
    • In fact, election-related scandals involving PSC commissioners in Tennessee caused the legislature to move from an elected to an appointed commission in 1996. Similar campaign financing controversies involving utility regulators have emerged in New Mexico and Montana. The potential for problems could lead to appeals of PSC decisions in court and regulatory uncertainty—which is not good for business in Kentucky.
    • Another consideration is that many Kentuckians live in communities where the electric company is owned by the local government and not subject to PSC regulation under state law—like right here in Frankfort. That means many Kentuckians would be voting for someone who doesn’t even regulate their electric rates.
    • The bottom line for the business community is clear: The current system is working. Why interject politics and uncertainty into a process that is producing low utility rates compared with the rest of the country? The focus at the PSC should be on fairness and low utility costs, not politics and campaign contributions.
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    Wednesday, February 23, 2011

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