Journal-Times (Grayson, KY)

Local News

January 16, 2013

AG says Olive Hill electric rate increases violate state law

Jan. 16, 2013 — The Attorney General’s Office of Rate Intervention Monday released a preliminary report by Director Jennifer Black Hans that details numerous observations and recommendations in response to consumer complaints filed against Olive Hill Utilities.

Chief among the AG’s findings was the revelation that electric rate increases, which have been implemented numerous times since 2006 without public hearings, are a violation of state law.

“Regarding ordinance No. 2000-3, to the extent that the ordinance permits increases in rates charged for services to retail customers of Olive Hill Utilities without a public hearing, it violates KRS 96.534,” Hans says in her report.

The report also addresses the legal authority of the city clerk, assistant city clerk, and the head utility clerk to make changes to electric rates.

“None of the ordinances supplied authorize such a delegation of authority,” Hans states, continuing with the assertion that, “municipal employees and officers should not be making legislative decisions regarding rates of service.”

The letter also states that, in the absence of an appointed board, the authority for setting utility rates falls solely to the City Council.

The document also outlines irregularities within the utility budget, specifically in the area of employee salaries.

“We note that personnel expenses (“salaries and costs”) represent between 20 and 25 percent of the total operating costs […] which appear extraordinarily high,” Hans says.

The letter also observes that documents submitted by the city do not adequately justify profit amounts in the utility budget and do not indicate that rate increases have been directly related to a rise in wholesale costs.

“If there are rate increases that are not directly related to wholesale costs or other quantifiable adjustments for the city’s costs, and are not subject to hearing or oversight by the City Council is almost certain and perhaps presumed that the profits are unreasonable and/or unjust,” Hans says.

She indicated in the letter that her inquiry is ongoing and that her list of observations and recommendations only list the primary concerns of her office and do not necessarily reflect all the violations that may have occurred.

Mayor Kenny Fankell told the Journal-Times on Tuesday that he had seen the AG’s report but had not read it.

The period of time covered by the AG’s report was during the administration of former mayor Danny Sparks.

Joe Lewis can be reached at or by telephone at 286-4201.

Text Only
Local News
  • wreck.JPG US 60 closed

    August 15, 2014 1 Photo

  • Olive Hill water line breaks

    August 14, 2014

  • Teen killed in Wednesday crash

    August 13, 2014

  • Fiscal Court seeks to borrow $1.5 million for roads

    Carter Fiscal Court met last Tuesday night to consider borrowing money for a massive road resurfacing project.

    August 13, 2014

  • Nikki Lewis.JPG Lewis named CCA administrator

    School kicks off today at Carter Christian Academy at Hitchins. The private school is welcoming a new administrator, Nikki Lewis.

    August 13, 2014 1 Photo

  • Grayson emergency.jpg Grayson’s emergency help now on the air

    When future emergencies require volunteers to assist first responders in Grayson, no one should be out of communications, thanks to help from the Carter County Community Fund (CCCF).

    August 13, 2014 1 Photo

  • brooke.jpg Local girl featured in Reba McEntire video

    Brooke Seagraves didn't think she stood much of a chance of appearing in Reba McEntire's latest music video but that didn't stop her older sister from entering her name.

    August 13, 2014 1 Photo

  • Dive 1.jpg Dive training a success

    They owe it all to community support. The Grayson Fire Department's Rescue and Recovery Dive team is seeing huge improvements, thanks to a community that is behind them 100 percent.

    August 13, 2014 3 Photos

  • Family Fun Night

    The Family Fun Night project began as a Relay for Life fundraiser. As the leadership class continued, I realized that the event could be more than a simple outdoor movie- and that it would need to be more than a simple fundraiser to truly be successful.

    August 13, 2014

  • PA Richards.JPG Richards serving as interim fire chief

    The Olive Hill Fire Department is still facing friction with City Council over ongoing budget concerns. However, the newly appointed interim chief is ready to move forward.

    August 13, 2014 1 Photo