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Kentucky Power Company's Storm Damage Expenses and Regulatory Responses

Strategic Insights

— 2 min read

Following the devastating storms on January 5, 2025, and February 15, 2025, which affected the state of Kentucky, the Kentucky Power Company (KPC) has been under scrutiny for its handling of storm-related expenses. The Kentucky Public Service Commission (KPSC) has issued a series of data requests to KPC to clarify its financial dealings and response to the storms. In response, KPC's Director of Regulatory Services, Tanner S. Wolffram, submitted detailed answers to the commission's questions, providing insight into the company's storm damage expenses and regulatory responses.

Key Takeaways:

  • The estimated year-to-date storm damage operating and maintenance expenses, exclusive of the January 5, 2025 and February 15, 2025 storms, is $236,000 as of February 28, 2025.
  • The estimated total year-to-date operations and maintenance expense related to storms for calendar year 2024 is $13.8 million as of February 28, 2025.
  • Kentucky Power does not generally replace its distribution equipment based on age and thus does not maintain its records in a manner that would allow the Company to provide the requested data for crossarms and conductors.
  • The Company does not have a set monetary threshold that determines whether or not to seek a regulatory asset for storm damage expenses.
  • The January 5, 2025 storm brought 5-10 inches of snowfall with ice accumulation totals of 0.10-0.47 inches across the Company's service territory, which would have been indiscriminate to the Company's facilities regardless of age.
  • The February 15, 2025 storm brought a total of 2 to 4 inches of rainfall to already saturated soils compounded by wind gusts of 40-50 mph across the Company's service territory, caused mudslides and damage.

Statistics:

  • Estimated year-to-date storm damage operating and maintenance expenses (exclusive of January 5, 2025 and February 15, 2025 storms): $236,000 as of February 28, 2025
  • Estimated total year-to-date operations and maintenance expense related to storms for calendar year 2024: $13.8 million as of February 28, 2025
  • Number of inches of snowfall during the January 5, 2025 storm: 5-10 inches
  • Number of inches of rainfall during the February 15, 2025 storm: 2-4 inches
  • Wind gusts during the February 15, 2025 storm: 40-50 mph
  • Age of damaged poles and transformers during the January 5, 2025 storm: approximately 45 years and 36 years, respectively
  • Age of damaged poles and transformers during the February 15, 2025 storm: approximately 50 years and 39 years, respectively

Sources:

  • Kentucky Power Company KPSC Case No. 2025-00031 Commission Staff's First Set of Data Requests Dated March 7, 2025
  • Tanner S. Wolffram, Director of Regulatory Services, Kentucky Power Company
  • Kentucky Public Service Commission
  • Notary Public's certification, Commonwealth of Kentucky, Case No. 2025-00031

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