Stumbo opposes rate increase

John O'Brien Aug. 15, 2007, 3:47pm


FRANKFORT, Ky. - Profit is not guaranteed for utilities, said Kentucky Attorney General Greg Stumbo Tuesday.

Stumbo filed documents challenging the request of Delta Natural Gas Co. for a $5.64 million increase in its rates, claiming the company should be entitled to no more than a $3.4 million increase.

"A utility is a monopoly and its rates should be set in a manner which enables the company to earn a reasonable profit -- not a guarantee of the profit," Stumbo said. "Delta wants to earn a profit regardless of how well it is run, even if it provides poor service.

"My Office of Rate Intervention will continue to battle against the company's request for guaranteed profits."

The case is pending before the state's Public Service Commission. Last week, Stumbo asked PSC member Caroline Pitt Clark if she plans to recuse herself from decisions involving Kentucky Utilities, Louisville Gas and Electric, Kentucky American Water Co., AT&T and other companies that are represented by Stoll, Kennon, Ogden. Her husband Justin works for the firm.

"Should you intend to preside over those cases, this office may have no choice but to file a motion to disqualify you based on an actual or apparent conflict of interest," said Dennis Howard II, acting director of the Office of Rate Intervention, according to a report in the Lexington Herald-Leader.

Gov. Ernie Fletcher appointed Clark to her post Aug. 3. Her husband's firm apparently does not represent Delta Natural Gas, which serves approximately 38,000 customers.

"The company has asked for an unjustifiable increase in its rates and we intend to challenge it in order to keep our rates as low as possible," Stumbo said. "In a time when people are already being pushed to the brink on energy prices, it is essential that my office continue to serve as the consumer's primary advocate before the PSC and argue for reasonable rates."

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