The Paducah Power System Board of Directors today approved small adjustments in rates that will result in a net increase in customers’ bills of approximately 3%, effective July 1, 2026. For the average residential customer using 1,000 kwh a month, that means an additional $4.86 a month. While the changes affect the customer charge and demand charges, the Power Cost Adjustment (PCA) applied to all energy usage will remain a credit as it has been for the last five years and will be even larger in the coming quarter.
PPS has had only two prior rate increases in the past twelve years, 3.4% in 2021 and 5% in 2014.
Today’s action is directly tied to ongoing inflation and a rise in transmission and distribution costs.
“While we’ve held rates steady in recent years by budgeting conservatively and selling capacity to create new revenue streams, the current overall rate of inflation is more than 20% higher than in 2021, and the cost of materials we use most has more than doubled,” said retiring Chief Executive Officer Dave Carroll. “Without a small adjustment now, we will slide into a financial position that’s neither strong nor stable and will be problematic for our customers down the road.”
Service wire that runs from the pole to the home has gone from $1.12 per foot to $2.04. Wooden poles are approximately 100% higher than they were, and pad mount transformers are more than 200% higher. The green underground transformers used most in yards have gone from $1,292 to $4,164 each. Those prices do not include any tariffs imposed.
According to PPS staff, the rate adjustment approved today is also needed to fund an adequate reserve for emergencies and achieve debt coverage metrics yielding better interest rates for future cost saving strategies.
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