‘Something has to change’: Kentucky’s utility regulator faces more work with fewer staff
FRANKFORT — Kentucky’s utility regulator is responsible for managing a larger, more complex caseload despite having a diminished and less experienced staff than in the past, its chairman told lawmakers Wednesday.
The Kentucky Public Service Commission regulates the rates and services of more than 1,100 utilities, ranging from massive investor-owned electric providers like Kentucky Power to small water districts that provide drinking water to rural communities.
The quasi-judicial state agency, headed by three commissioners appointed by the governor and confirmed by the state Senate, also hears requests from utilities to retire or build new facilities, such as natural gas plants, and fields complaints from Kentuckians about service and rates.
But in an interim legislative committee hearing, Commission Chairman Kent Chandler said the commission is completing its duties with fewer skilled employees, particularly attorneys and accountants. The agency is often seeing those skilled workers leave for significantly higher-paying jobs elsewhere, sometimes for double the pay working at a utility.
“Something has to change because we’re getting, if not more cases, certainly more complex cases,” Chandler said. “We need to reduce the turnover of the people that we have because by the time they figure out what’s going on, they get really good at their job — they can go make money, some better money or have an easier job somewhere else.”
Chandler said the commission had 96 employees as of 2011; those employees had 12,000 cumulative months of PSC service. The PSC is now down to 72 employees, and they have less experience; their cumulative length of PSC service is 8,500 months.
Turnover rate for employees at the commission ranges annually from 20% to 35%, with the turnover rate nearing 40% in 2022. The commission has had to keep more attorneys on staff to compensate for the expectation that new attorneys will leave after a little more than a year.
The entirety of management for the commission’s Division of Financial Analysis — whose staff accountants and economists examine a utility’s finances and assets — had recently also turned over. Finding replacements is difficult, he said, because the skill sets needed are often only found at other state utility regulators or utilities.
“Those are the three or four people that know the absolute most about what we do about the financing, the economics, the accounting of utilities,” Chandler said. “It is just such a unique skill set and unique experience.”
Chandler said the commission has contended with its hiring headwinds as it’s doing more work.
On an annual basis, he said, the commission the past two years has issued about 1,700 orders. Before the two previous years, the most orders the commission had entered in a year in the past 15-year period was 1,500 orders.
The commission is also dealing with what Chandler calls “the most consequential and complicated case” that he can find in the commission’s previous three to four decades: Louisville Gas and Electric and Kentucky Utilities is seeking approval to retire some of its coal-fired power generation and replace it primarily with natural gas plants, along with proposing two solar installations and a utility-scale battery storage facility.
“There really are long-term detrimental effects to the economy of the Commonwealth and to our individual consumers for an under-resourced Public Service Commission, a Public Service Commission who doesn’t either have the opportunity to do its job well or frankly doesn’t do its job well,” Chandler said.
Chandler said the commission has tried to reach out to business schools at universities in the state to advertise its job openings. He said recent increases in the amount of state funding the commission receives has allowed it to fill eight new positions.
“Hopefully we find a couple of solutions in there,” Chandler said. “But I just can’t give you a single silver bullet issue as to the reason why we’re having turnover that we can necessarily fix.”