The Office of Rate Intervention serves as a watchdog for consumers in matters relating to health insurance, natural gas, water, sewer, electric and landline telephone rates. Under Kentucky law, the office is responsible for representing the interests of Kentucky consumers before governmental rate making agencies, focusing on utility cases (electric, water, telecommunications, and natural gas) before the Public Service Commission – KRS 367.150 (8) – and health insurance rate cases filed with the Department of Insurance – KRS 304.17A-095.
The Office of Rate Intervention fights to ensure your utility bills are fair. Since 2008, the office has helped Kentucky consumers avoid more than $1.6 billion in proposed utility rate increases. Over the past two fiscal years, the costs avoided from rate cases in which the office participated totaled approximately $300 million.
Does the Office Review and Monitor Consumer Health Insurance Rates?
Since legislation passed in 1996, the Office has also reviewed and monitored consumer health insurance rates, helping to make the rate application process open and understandable to the consumers of the Commonwealth. With the 1996 legislation, health insurers were required to publicly disclose reasons justifying rate increases thereby increasing transparency for consumers. Rate Intervention also informally mediates concerns between utility, landline telephone, and propane gas customers and their providers.
What Type of Cases has the Office Intervened in?
During the past biennium, the Office of Rate Intervention actively intervened in numerous cases. We intervened in the LG&E/KU Environmental Cost Recovery case and secured Rate Intervention savings for Kentuckians of $172 million. We also took on Kentucky American Water Company, which sought to increase its base rates by over 15 percent. We were able to cut the increase in half, and as a result of the settlement, we eliminated a proposed infrastructure rider, which would have allowed rates to be increased between rate cases as a line item on customer’s bills. In the Atmos Energy rate case, we intervened holding the company to just an average residential customer increase of 5 cents or .1 percent of the company’s original request. Because of our involvement on behalf of Kentuckians, we kept the company’s increase to only $500,000. This greatly reduces the burden on citizens each month. In the largest rate-case of the biennium, LG&E/KU, the attorney general along with numerous other intervening parties held the company to a base rate electric revenue increase of approximately $114.3 million, while saving nearly a million customers $90 million annually. The attorney general was also instrumental in assuring the continuation of a program to assist low-income ratepayers securing a shareholder contribution of $1.45 million a year to the program.
Does the Office Monitor Rapidly Changing Technology's Impact on Ratepayers?
ORI fights to protect consumers from the harmful and unexpected effects of rapidly changing technology. Whether it is fighting against utility rate designs that harm seniors or ensuring that customers receive the benefits promised from new technology, the attorney general ensures his statutory mandate is carried out. We work to provide alternative rate designs to help ensure the elderly and low income populations were protected from unduly harmful rate designs made possible by the installation of “smart-meter” technology.