The rider, which was approved in early March, is limited to new or existing large commercial and industrial customers who implement new production projects.
Â“We are pleased the Kentucky Public Service Commission saw the value in our proposal to facilitate location and expansion offers throughout Eastern Kentucky,Â” said Greg Pauley, Kentucky Power president and chief operating office. Â“Kentucky Power takes great pride in working with local, regional and state organizations to promote economic growth in the communities we serve. This program will help promote stronger local economies to bring in new jobs and businesses.
To qualify, each new investment must create at least 500 kW of new maximum billing demand over a base level and could receive a temporary demand charge discount of up to 50 percent depending upon the length of the contract. In addition, a supplemental demand discount of up to 5 percent may be available for customers who create and sustain 50 or more new jobs.
Creating and sustaining at least 25 new jobs may qualify for a reduced supplemental demand discount. The customer must demonstrate that without this incentive, the qualifying new or increased investment and the associated electrical demand would be located outside the companyÂ’s service territory or would not be placed in service. The Economic Development Rider requires a special contract that must be approved by the Kentucky Public Service Commission prior to taking effect. The contract period may extend for up to 10 years and the ensuing discount period may not be more than half the contract period, among other requirements.
The company is advancing the communities it serves in Eastern Kentucky through multiple contributions and economic development projects. Kentucky Power is an active participant in the Shaping Our Appalachian Region SOAR initiative created by Gov. Steve Beshear and Rep. Hal Rogers, R-Ky. SOARÂ’s goal is to improve the economy and quality of life in the region. Kentucky Power also has partnered with 12 regional and local banks to finance up to $75 million in capital projects and further promote area economic development.
Kentucky Power has made other key contributions to economic development efforts across the region, including the Ashland Alliance, Southeast Kentucky Chamber, and the new regional economic development project, One East Kentucky. Kentucky Power also has commissioned two economic development studies for the region that has provided significant guidance in developing new economic development strategies in eastern Kentucky. The company currently has a third contract with an economic development site consultant assisting the region with preparing the East Park Ashland, MarionÂ’s Branch Pikeville and Coalfields Hazard industrial parks for job creation and additional investments.
In 2013, the AEP Foundation contributed more than $300,000 for the construction of the Coal Building at the University of Pikeville, School of Osteopathic Medicine expansion. In total, Kentucky Power has invested approximately $900,000 for economic development efforts in eastern Kentucky since 2012.
Last year through the Kentucky Power Economic Advancement Program KEAP, which is funded by AEP shareholders, three Eastern Kentucky projects Â– the Big Sandy Area Development District, the City of Paintsville and the Louisa Chapter Southeast Kentucky Chamber of Commerce Â– received a total of $200,000 to spur growth. Kentucky Power has already kicked off the KEAP program for 2015 that will provide an additional $200,000 for projects this year. In addition to the $200,000 annually for five years, the company is contributing $33,000 annually for five years to the Ashland Community and Technical College and the Big Sandy Community and Technical College for job training. The KEAP program will invest more than $1 million into the region over five years, from 2014 to 2018.
Â“We take seriously our role as a partner for progress in the areas we serve,Â” Pauley said.