A JOINT RESOLUTION regarding utility fuel adjustment clauses under the jurisdiction of the Public Service Commission and declaring an emergency.
SJR134 is a joint resolution directing the Kentucky Public Service Commission (PSC) to review and revise the administrative regulation governing utility fuel adjustment clauses (FACs). The stated goal is to reduce month-to-month volatility in the fuel surcharge that electric utilities pass through to customers, in light of rising electricity bills and higher fuel costs, especially natural gas. The resolution requires the PSC to open a new or existing administrative case by May 15, 2026, provide a public comment process for utilities and the public, and then amend the FAC regulation by August 15, 2026.
The resolution also requires the PSC to report back to the Legislative Research Commission by December 15, 2026, including the amended regulation, a comparison to the prior rule, a summary of comments, and an explanation of how the changes are expected to reduce volatility. The bill declares an emergency, making it effective immediately upon passage and approval, based on concerns that energy costs and summer supply constraints could make electricity unaffordable and increase disconnections.
If enacted, SJR134 would not directly change a statute in the Kentucky Revised Statutes, but it would compel the Public Service Commission to initiate an administrative proceeding and amend its FAC regulation. The practical effect would be on electric utilities and ratepayers, because the FAC is the mechanism that allows utilities to pass fuel costs through to customers. The resolution is aimed at smoothing bill fluctuations and potentially reducing the frequency or magnitude of sudden surcharge increases, which could affect utility billing practices, customer arrearages, and disconnection risk.
The bill appears to have strong support in the Senate, passing 35-0 on adoption of the resolution. The text frames the issue as a consumer affordability and public safety concern, emphasizing rising utility bills, household budget strain, and risks to vulnerable residents. No committee transcript is available, but the unanimous vote suggests broad agreement with the need for PSC review of the fuel adjustment clause.
The main policy tension is between protecting customers from volatile and potentially unaffordable utility bills and preserving utilities’ ability to recover fuel costs promptly through the FAC. Supporters of the resolution emphasize ratepayer hardship, especially for middle-income households, elderly residents, children, and people with medical needs who may face disconnection. Potential concerns, though not documented in transcripts here, would likely come from utilities or regulators worried that reducing FAC volatility could delay cost recovery, complicate utility finances, or shift risk away from customers and onto utilities.