Proposed utility rate hikes extra costly to poor
Apr 13 - McClatchy-Tribune Regional News - Andy Mead The Lexington
Herald-Leader, Ky.
Johny Alford was doing OK financially until he lost the love of his life
and a substantial portion of his household income.
Now he still gets his $682 Social Security check each month, but not his
wife's $400 check.
He's had problems paying utility bills and worries about what will
happen if his light and water bills get even higher because of proposed
rate increases.
"I never had to ask for nothing until my wife died, then I just got
down," he said.
Alford, 73, who lives near Lexington's Georgetown Street, has
had to ask the Community Action Council for help when his check runs out
before the month does.
Jack Burch, the non-profit agency's executive director, said tough
economic times have greatly increased the number of people coming in his
door looking for help with utility bills.
"Some people had a really good job, and they're working retail now," he
said. "They were making $25 an hour, and now they're making $8."
Also, he said, people receiving Social Security and Supplemental
Security Income didn't get a increase in 2010 because inflation remained
low.
The 37 percent rate increase proposed by Kentucky American Water would
add $9.44 to the average customer's monthly bill. Kentucky Utilities has
asked for a hike that could add $11.70 for its average customers.
That translates to $254 a year, or 2.4 percent of the income of a senior
citizen living on a fixed income at the federal poverty level, said
Charlie Lanter, who is Community Action's manager of program
development.
"It is an impossible choice for some individuals and families where $20
a month is the difference between eating and taking important
medications," Lanter said.
Both utilities have programs designed to help people with low incomes.
Kentucky Utilities' customers donated $47,780 to that utility's Winter
Care program last year, and the company added $70,200, company spokesman
Cliff Feltham said. The program has been around since 1983 and has grown
over the years, he said.
Kentucky American's Help to Others, or H2O, started in 1997 with $5,000
from the company. This year, that amount will be $60,000, company
spokeswoman Susan Lancho said.
Money in the funds goes to Community Action, which distributes it to
low-income people who can't pay their bills.
Both companies also take steps to help customers use less of what
they're selling, Feltham and Lancho said.
For KU, that means providing free energy audits to help customers find
places where warm or cool air is leaking out of their houses. For
Kentucky American, it means providing leak-detection kits to Community
Action to distribute to its clients.
Burch, the Community Action director, said the funds provided by the
utilities and their customers each year aren't enough to meet the
growing demand.
Community Action routinely intervenes when utility rate cases are argued
before the state Public Service Commission.
For the current cases, it is considering proposing some kind of
"lifeline" program that would allow low-income people to pay a very low
amount for a minimum amount of water and electricity, Burch said. Such
plans have worked in a few other places, he said.
But they might run into problems in Kentucky.
Andrew Melnykovych, a spokesman for the PSC, said state laws and
regulations prohibit his agency from approving preferential rates for
any class of customer.
Lancho said Kentucky American proposed in a 2004 rate case that it give
a break to customers at or below the federal poverty level. The attorney
general's Rate Intervention Office supported the idea, but the PSC
rejected it, she said.
Feltham said Kentucky Utilities had studied the lifeline concept but
agreed the issue apparently is moot under current laws and regulations.
But Burch, faced with a growing demand from people who can't afford to
keep their lights on and water running, said something has to be done.
"I'm starting to think that some of the old solutions don't work," he
said. "Assistance funds don't solve many problems, and I'm not sure
they're even Band-Aids any more."
Reach Andy Mead at (859) 231-3319 or 1-800-950-6397, Ext. 3319.
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