Good Question: Why do Ky. electric utility bills charge an environmental surcharge

LEXINGTON, Ky. (WKYT) — For today’s Good Question, Martin asks: “Why do our electric utility bills charge an environmental surcharge floating fee each month, sometimes being as much as 21%?”

That environmental surcharge is the cost your utility company is paying to comply with the federal Clean Air Act. Equipment like scrubbers can be expensive to operate and maintain, and they are allowed to pass that cost on to their customers.

Sheri Mahan with the Public Service Commission says there is no limit to how high that surcharge may be. She pointed out a quote from the Kentucky Supreme Court when a case on the law went before them.

The legislative intent of the statute was to promote the use of high-sulfur Kentucky coal by permitting utilities to surcharge their customers for the cost of a scrubber, which is part of a power plant that cleans high-sulfur coal in order to meet the acid rain provisions of the federal clean air act amendments of 1990.

There is no limit to how high that surcharge can go, and it can change every month, although there are reviews to make sure it’s being applied properly.

It could also vary greatly depending on where you live. Martin shared his bill. His surcharge was more than 17%.

Fleming-Mason Energy explains that every penny they collect for that surcharge goes to their supplier, East Kentucky Power.

Mahan said the recent increase in Fleming-Mason’s environmental surcharge is likely a result of a recent amendment to East Kentucky Power’s environmental compliance plan, which led to higher costs recovered in the environmental surcharge.

in November of last year, East Kentucky Power got approval to build a new landfill at one of their stations. The cost of the project was $24.6 million, with ongoing annual costs of $242,000.

She said higher use during the winter months could have also played a part.

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