Kentucky electric utilities made more than 268,000 utility disconnections over a recent 12-month period as federal funding to prevent disconnections fell far short of Kentuckians’ financial need, according to a recent analysis of state and federal data. The February report examined disconnection data reported by 23 electric utilities to state utility regulator Kentucky Public Service Commission across three fiscal years, along with analyzing each utility’s rules and fees on when and how utility disconnections and reconnections can happen.  The report found an 87% increase in disconnections across all utilities in fiscal year 2025 (July 2024-June 2025) compared with the previous fiscal year. The large increase was driven primarily by a spike in disconnections by utility Louisville Gas and Electric and Kentucky Utilities, or LGE and KU. The investor-owned companies serve the most electric customers in the state with approximately 1.3 million customers for their gas and electric service.  “It was just kind of shocking to see how much of an increase there was, and in particular that LGE, KU was driving a lot of that,” said Rebecca Shelton, the director of policy at the Letcher County-based Appalachian Citizens’ Law Center and one of the report’s authors. “Once you’re disconnected, that’s where the hardship starts.”  The report, co-published by the Energy Equity Project created at the University of Michigan and the utility watchdog nonprofit Energy Policy Institute, also analyzes rising residential electricity costs in the state — increasing by 128% between 2001 and 2024 — and the financial burden low-income Kentuckians face to pay electricity costs. The report found Kentucky census tracts in both urban and rural areas where people face the highest “energy burden”— or the amount of income going toward energy costs. “When it comes to utility affordability, one of the most urban areas of the state and one of the most rural areas of the state have a lot in common: Eastern Kentucky and Louisville metro,” Shelton said.  Drew Gardner, an LGE and KU spokesperson, in an emailed statement responding to questions including why LGE and KU’s disconnections increased, said the number of disconnections varies each year “for several reasons, including our weather-related suspensions.”  “Our current year-round policy factors in Kentucky’s variable weather, which can bring stretches of unseasonably warm or cold days throughout the year where we suspend service disconnections,” Gardner said. “Additionally, long-term moratoriums make it possible for customers to build up significant debt that may be more difficult to resolve. Large, accumulated balances can create greater financial hardship for customers and may reduce the amount of assistance available from limited community resources.” Gardner said in his statement that the utility encourages customers facing difficulty paying their bill to contact the utility as soon as possible to set up potential payment plans or connect people with community resources to help pay for bills.  What the report data shows  The report’s authors found that utilities serving a high percentage of customers with higher energy burdens did not necessarily disconnect customers at a higher rate.  Big Sandy RECC, an electricity cooperative serving parts of Eastern Kentucky counties where people face higher energy burdens, had seven months during the roughly three year period where the cooperative did not disconnect any customers. That included during winter months going into 2025. Jeff Prater, the president and CEO of the cooperative, did not respond to Lantern emails requesting an interview about the cooperative’s disconnection policies.  On the other hand, report authors found Louisville Gas and Electric, which serves customers in Louisville and surrounding counties, had a “surprisingly high” disconnection rate even though their customers have, on average, the lowest energy burden of all utilities studied.  Between fiscal year 2025 (July 2024 to June 2025) compared to fiscal year 2024 (July 2023 to June 2024), report authors found Louisville Gas and Electric’s utility disconnections increased by 285%.  “This enormous increase in disconnections is also somewhat surprising because there was not a rate increase during this time period and an increase in disconnections occurred across all months,” the report authors wrote.  The report also found that a longstanding federal program that serves as a safety net for low-income people to help pay for heating and cooling costs doesn’t come nearly close to the amount of outstanding debt that Kentuckians who are disconnected have. The Low-Income Home Energy Assistance Program, or LIHEAP, provides low-income recipients with a one-time credit toward electricity bills during the summer or winter, including in emergency situations such as when someone is facing a utility disconnection.  From July 2024 to June 2025, the amount of LIHEAP benefits provided to customers associated with the 23 utilities analyzed in the report was $33,253,076. The total amount of utility bill debt customers who had their electricity service disconnected over that same time frame was $68,560,819. Combining those two totals, the report authors wrote the amount of funding needed to prevent utility disconnections over that timeframe is over $100 million.  Shelton said while she considers LIHEAP to be “really important,” she believes “the scale of the need has just outpaced that program.”  The authors cited Louisville Gas and Electric customers receiving less LIHEAP funding in fiscal year 2025 as a potential reason for the increase in disconnections at the utility, along with the utility installing smart meters that allow it to remotely disconnect and reconnect customers.  “I’m not saying that that is why there are more disconnections, but it is certainly easier to disconnect and reconnect people when you don’t have to drive out to their house,” Shelton said about the smart meters. “There haven’t been any studies on that, but I think it’s definitely something to explore.”  Gardner, the LGE and KU spokesperson, in his statement said LGE and KU’s smart meters “can reduce the duration customers are without service” with there being no need to send an employee to reconnect a customer. Gardner said the utility eliminated its fee to reconnect customers when they are reconnected remotely.  “This technology ultimately helps us restore service more quickly and reduce costs for customers,” Gardner said about the meters.  The report authors wrote that almost all of the studied utilities charge fees to disconnect and reconnect customers that can be a burden on customers who are already struggling to pay bills; those fees range from $30 to hundreds of dollars.  Shelton told the Lantern the fee charged by South Kentucky RECC, an electricity cooperative serving Pulaski and nearby counties, to reconnect a customer outside of business hours was an outlier.  South Kentucky RECC charges $387 for an after-hours reconnection, while reconnecting during business hours is $47.76. The Lantern did not receive a response to emails sent to an inbox associated with South Kentucky RECC requesting an interview about their reconnection fees.  The report also analyzed the minimum amount of debt customers had before they were disconnected by utilities. The majority of utilities had made disconnections when a customer owed less than $100.  One of the utilities, electric cooperative Nolin RECC, had made more than one disconnection when a customer had owed less than $25. A spokesperson for Nolin RECC did not respond to emails requesting an interview about the data.  Shelton said it was “shocking” to see how little debt someone can have for a disconnection to happen.  “To put someone through that level of hardship for that small of a debt seems unreasonable to me,” Shelton said.  Joe Arnold, a spokesperson for the organization Kentucky Electric Cooperatives, which represents electric cooperatives across the state, in a statement said the nonprofit electric cooperatives are led by local cooperative members who “always come first, not activist groups or outside agendas.”  “There are no out-of-town shareholders or profit motives,” Arnold said about the cooperatives. “For any co-op members having trouble paying their bill, co-ops work directly with them to help them avoid falling into arrears and to address payment challenges before balances become unmanageable which can lead to permanent disconnection. No one wants that.”  Arnold said cooperatives have policies in place “to address extreme weather, medical needs, and hardship situations” and also encourage members to reach out to discuss payment plans. He said cooperatives are urged to contact their local co-op to discuss “payment arrangements, levelized billing and other tools to avoid disruption in service.”  What the report recommends  The report authors argue there are a number of ways to help prevent utility disconnections in Kentucky.  Those policy recommendations include:  Establishing a state fund of $75 million annually for utility bill assistance to prevent disconnections. Set a minimum floor of $100 of debt before allowing a disconnection.  Prohibit disconnections during extreme high and low temperatures, along with prohibiting disconnections over weekends.  Ensure state utility regulator Kentucky Public Service Commission has the authority to address high energy burdens through “equitable” rates, implementing utility bill debt management programs and other measures. Expand weatherization programs targeting households with high energy burdens.  Shelton spoke earlier this month at a press conference that advocated for the passage of a bipartisan House bill that would create extreme temperature standards in state law for when disconnections would be prohibited.  She said Democratic Kentucky Gov. Andy Beshear’s proposal to create a $75 million fund to aid with utility bill assistance is “certainly helpful.” Shelton also pointed to a joint resolution primarily sponsored by Sen. Scott Madon, R-Pineville, that would direct the Public Service Commission to investigate ways to improve utility affordability for low-income and fixed-income individuals.  “I think this is such a huge problem, and I think people are really eager for some solutions,” Shelton said. “But there is a lot to consider in terms of understanding what can we get that’s actually going to be effective.”  She said, in reference to Madon’s joint resolution, that having the commission “study this issue is a good first step.” The post Surge in KY utility disconnections raises alarms as federal funding falls short of need appeared first on The Lexington Times. ...read more read less