Kentucky PSC Schedules October 3, 2013 Informal Conference in TVA Pole Rate Preemption Case

The Kentucky Public Service Commission has scheduled an informal conference on October 3, 2013 to establish procedures for the rehearing of its controversial ruling that the PSC is preempted by the federal Tennessee Valley Authority (TVA) Act from regulating the pole attachment rates of Kentucky’s TVA electric cooperatives (June 2013 Order). The June 2013 Order followed a request by the Kentucky Cable Telecommunications Association (KCTA) for the PSC to affirm that it has the authority to regulate such rates.  On August 6, 2013 the PSC granted the KCTA’s rehearing request because the June 2013 Order “was not supported by substantial evidence.” (August 6, 2013 Order). The PSC will now establish procedures to rehear the issue of “whether the TVA has, or does exercise, jurisdiction over the pole attachment rates of the TVA Cooperatives.”

The PSC’s June 2013 Order relied upon two TVA letters asserting that in TVA’s role as “exclusive retail rate regulator” for TVA utilities, the TVA takes into account “revenue received from pole attachment fees.” The KCTA had no opportunity to challenge TVA’s unsworn and unverified assertions before the June 2013 Order which ruled that “not only does the TVA take into account revenue received from pole attachment fees, it explicitly establishes requirements for how the pole attachment fees are calculated to avoid having to raise retail rates.” Accordingly, the June 2013 Order concluded that the TVA’s retail rate oversight for TVA utilities was a “comprehensive, top to bottom, regulatory scheme” that preempted the PSC from regulating TVA cooperative pole attachment rates.

The rehearing proceeding will provide KCTA the opportunity to demonstrate that the TVA Act does not preempt the PSC’s authority to regulate the pole rates of Kentucky’s TVA electric cooperatives.