In less than a week, the Kentucky Public Service Commission must rule on the sale of Kentucky Power to Liberty Utilities for $2.8 billion. But the PSC currently only has one commissioner. Despite not having a quorum, Gov. Andy Beshear said Thursday the sole commissioner can rule on the sale.
“When you look at that statute, it talks about what is a quorum, but that a vacancy will not prevent the PSC from taking action,” Beshear said. “In the past, there was a situation where for a short period of time, there was only one commissioner, and that commissioner acted and it was never challenged.”
In mid-April, the Kentucky Senate failed to confirm Amy Cubbage as a commissioner causing the regulatory agency to lose a quorum. The Senate also failed to confirm Marianne Butler to the commission. The governor said politics is to blame.
“They knew what would happen if they didn't confirm two appointees, and they knew what would happen if they waited until the very last moment to do it,” he said.
Beshear did not say if he will appoint another commissioner before May 4, the deadline of the Kentucky Power sale.
“So we're going through our process to get the right person. And we'll have some more news once we have that right person,” he said.
Although the PSC said it cannot comment on specific cases, in an email, an agency spokesperson pointed to KRS 278.080, which regulates commissions and quorums.
Part of the statute reads: “No vacancy in the commission shall impair the right of the remaining commissioners to exercise all of the powers of the commission.”
Several Kentucky lawmakers and the Attorney General’s office are opposed to the sale, unless Kentucky Power agrees to return approximately $578 to $585 million in profits from the sale to eastern Kentucky customers.
Without that condition, lawmakers worry it could mean more rate hikes for people in eastern Kentucky, who already pay some of the highest electricity rates in the state.
During a hearing before the PSC in late March, Peter Eichler with Liberty Utilities was asked if he agreed with Kentucky Power’s parent company returning $578 million in profits from Liberty to ratepayers. Eichler disagreed.
“A penalty of that size simply means that there's not going to be any transaction. And so I don't believe that he would pursue the closing of the acquisition if they were forced to pay such a penalty,” Eichler said.
Rep. Angie Hatton, a Democrat from Whitesburg and an attorney, said she is concerned about how the vacancy might affect the sale.
“Worst case scenario, we continue with [Kentucky Power] under the current rates,” Hatton said. “Second worst case scenario the sale is allowed to go through but without any return of profits to the ratepayers.”
“The statute does seem to be a bit contradictory since it requires a majority of a quorum, but it does allow one commissioner to act.”
Republican Attorney General Daniel Cameron's office did not respond to a request for comment on the statute governing the Public Service Commission.
