Editorial Cartoon

Members of the Kentucky Public Service Commission staff filed its recommendations in the rate increase request that Southern Water filed earlier this year, and, buried in the data and information is a whopping $639,956 in expenses that Southern Water should not have charged ratepayers last year.

PSC staff recommended cutting that amount from Southern Water’s list of expenses in 2018, calling some of it “unreasonable” and “questionable.”

The breakdown goes like this. PSC staff recommends cutting the following amounts from Southern Water’s 2018 expense list for the following reasons: 

• $461,600 for the purchase, production and treatment of water that was lost in line breaks and other reasons

• $112,000 for “unreasonable” healthcare insurance coverage benefits given to Southern Water employees

• $54,756 for “miscellaneous expenses” that were “questionable and were not necessary for the provision of water service” to Southern’s customers. This total also includes $5,719 for “health care reimbursements” and $14,000 in late fees and overdraft charges. 

• $11,600 paid to a former attorney whose invoices, the PSC staff claim, were not detailed and who wasn’t recorded as present in meeting minutes at Southern Water.

All of that equals $640,000 of, at best, questionable expenses that Southern Water funded last year on the backs of its ratepayers, who are now paying a higher flat rate. Also, if the recommendations made last week are adopted by the PSC, those same customers will soon start making monthly payments on the meters Southern Water should have bought years ago. 

It’s disgusting to see all of that waste lumped together like that. 

That $640,000 could have went a long way in buying new meters at Southern. 

We know the PSC will consider all aspects in making its decision in this rate case, and we know that throughout this process, the Kentucky Attorney General’s Office of Rate Intervention has also been looking out for what’s best for Southern Water customers.  

But $640,000 is uncalled for. 

It took decades of neglect for Southern Water to get to where it lost nearly $462,000 a year through old lines and other issues. But the other $178,356 of expenses suggested to be cut, those appear to be the direct result of decisions made by district leaders last year. Through our own reporting, we know some of that excess was to buy high-price meals at bars during off hours, as well as other meals at local restaurants for reasons that did not appear to be adequately justified. 

Southern Water customers shouldn’t have to pay for stupidity, which is why the staff recommendation to remove these expenses appears to be a sound one. 

But, these expenses were already paid. They were signed and delivered last year, and it’s sad that Southern Water customers can’t get a reimbursement for that amount. 

Ultimately, someone must be held accountable for this mess, and it shouldn’t be the ratepayers of Southern Water, who were held hostage to decisions made by a board appointed to represent the interests of the people, but who clearly failed to provide the oversight necessary to prevent waste.

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