East Kentucky Power Environmental Surcharge Six-Month Review Order

COMMONWEALTH OF KENTUCKY BEFORE THE PUBLIC SERVICE COMMISSION In the Matter of:

O R D E R On March 17, 2005, the Commission approved East Kentucky Power Cooperative,

Inc.'s (EKPC) environmental surcharge application and established a surcharge

mechanism. The Commission also approved a mechanism to pass through the 1

environmental surcharge to EKPC's 16-member distribution cooperatives (Member

Cooperatives). Pursuant to KRS 278.183(3), at six-month intervals, the Commission 2 must review and evaluate the past operations of the environmental surcharge, disallow any surcharge amounts found not to be just and reasonable, and reconcile past surcharges with actual costs recoverable pursuant to KRS 278.183(1). On its own motion, the Commission initiates (1) the six-month review of EKPC's environmental

Case No. 2004-00321, Application of East Kentucky Power Cooperative, Inc. for Approval of an 1

Environmental Compliance Plan and Authority to Implement an Environmental Surcharge (Ky. PSC Mar.

17, 2005). Case No. 2004-00372, Application of Big Sandy RECC, Blue Grass Energy Cooperative 2AN ELECTRONIC EXAMINATION BY THE ) Corporation, Clark Energy Cooperative, Cumberland Valley Electric, Farmers RECC, Fleming-Mason

Energy, Grayson RECC, Inter-County Energy Cooperative, Jackson Energy Cooperative, Licking Valley PUBLIC SERVICE COMMISSION OF THE )

RECC, Nolin RECC, Owen Electric Cooperative, Salt River Electric, Shelby Energy Cooperative, South ENVIRONMENTAL SURCHARGE MECHANISM ) Kentucky RECC and Taylor County RECC for Authority to Pass Through the Environmental Surcharge of OF EAST KENTUCKY POWER COOPERATIVE, ) CASE NO. East Kentucky Power Cooperative, Inc. (Ky. PSC Mar.17, 2005). INC. FOR THE SIX-MONTH EXPENSE PERIOD ) 2026-00070

ENDING NOVEMBER 30, 2025, AND THE PASS-) THROUGH MECHANISM OF ITS SIXTEEN ) MEMBER DISTRIBUTION COOPERATIVES )

surcharge for expense months ending November 30, 2025; and (2) the corresponding six-month review of Member Cooperatives' pass-through mechanism for expense months ending November 30, 2025. To facilitate this review, a procedural schedule is set forth in Appendix A to this Order. In accordance with that schedule, EKPC is to file prepared direct testimony: (1) in support of the reasonableness of the application of its environmental surcharge mechanism during the period under review; and (2) in support of the reasonableness of the application of the pass-through mechanism during the period under review. In addition, EKPC and the Member Cooperatives are to file their responses to the information requested in Appendix B to this Order. All requests for intervention should be filed by the date set forth in Appendix A. As set forth in 807 KAR 5:001, Section 4(11)(a), a person requesting permissive intervention in a Commission proceeding is required to demonstrate either (1) a special interest in the proceedings which is not adequately represented in the case, or (2) that the person requesting permissive intervention is likely to present issues or develop facts that will assist the Commission in fully considering the matter without unduly complicating or disrupting the proceedings. Further, KRS 278.040(2) requires that a person seeking intervention must have an interest in the rates or service of a utility, as those are the only

matters that are subject to the Commission's jurisdiction.

Based on the foregoing, the Commission finds that any person requesting to

intervene in a Commission proceeding must state with specificity the person's special

interest that is not adequately represented or the issues and facts the person will present that will assist the Commission in fully considering the matter. A mere recitation of the

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quantity of electricity consumed by the movant or a general statement regarding a potential impact of a possible modification of rates will not be deemed sufficient to establish a special interest. IT IS THEREFORE ORDERED that:

1. The procedural schedule set forth in Appendix A to this Order shall be
   followed.

2. EKPC and each of its Member Cooperatives, that also were parties to Case
   No. 2004-00372 as listed in footnote 2 of this Order, shall be parties to this case.

3. On or before the date set forth in the procedural schedule, EKPC and each
   of its Member Cooperatives shall file their responses to Commission Staff's First Request for Information, attached to this Order as Appendix B.

4. EKPC and each of its Member Cooperatives shall respond to any additional
   requests for information propounded by Commission Staff, whether identified on the procedural schedule or otherwise, as provided in those requests.

5. Any party filing a paper with the Commission shall file an electronic copy in
   accordance with the electronic filing procedures set forth in 807 KAR 5:001, Section 8. Electronic documents shall be in portable document format (PDF), shall be searchable, and shall be appropriately bookmarked. The Commission directs the parties to the

Commission's July 22, 2021 Order in Case No. 2020-00085 regarding filings with the 3 Commission.

Case No. 2020-00085, Electronic Emergency Docket Related to the Novel Coronavirus COVID 3

19 (Ky. PSC July 22, 2021), Order (in which the Commission ordered that for case filings made on and after

March 16, 2020, filers are NOT required to file the original physical copies of the filings required by 807 KAR 5:001, Section 8).

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1. As set forth in 807 KAR 5:001, Section 4(11), a person requesting permissive intervention in a Commission proceeding is required to demonstrate either (1) a special interest in the proceeding that is not otherwise adequately represented in the case, or (2) that intervention is likely to present issues or develop facts that will assist the Commission in fully considering the matter without unduly complicating or disrupting the proceedings. Therefore, any person requesting to intervene in a Commission proceeding

must state with specificity the person's special interest that is not otherwise adequately

represented, or the issues and facts that the person will present that will assist the Commission in fully considering the matter. A mere recitation of the quantity of utility service consumed by the movant or a general statement regarding a potential impact of possible modification of rates will not be deemed sufficient to establish a special interest.

1. Any motion to intervene filed after the dates established in Appendix A shall
   show a basis for intervention and good cause for being untimely. If the untimely motion is granted, the movant shall accept and abide by the existing procedural schedule.

2. Unless a party granted leave to intervene states its objection to the use of
   electronic filing procedures in a motion for intervention, the party shall:

3. Be deemed to have consented to the use of electronic filing
   procedures and the service of all papers, including Orders of the Commission, by electronic means; and

4. Within seven days of the entry of an Order of the Commission
   granting its intervention, file with the Commission a written statement that it waives any right to service of Commission orders by United States mail and that it or its authorized agent possesses the facilities to receive electronic submissions.

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1. EKPC shall, by the date set forth in Appendix A, file its prepared direct
   testimony in support of the reasonableness of the application of its environmental surcharge mechanism and the pass-through mechanism during the period under review and on a proposal to roll its environmental surcharge into existing base rates.

2. Within seven days of the Commission's granting intervention to a party,
   EKPC shall provide the party with a copy of its monthly environmental surcharge reports as filed with the Commission for the review period.

3. EKPC's monthly environmental surcharge reports and supporting data for
   the review period shall be incorporated by reference into the record of this case.

4. The Commission does not look favorably upon motions to substitute
   witnesses or excuse witnesses from testifying at Commission hearings. Accordingly, motions to substitute witnesses or excuse a witness from testifying at a Commission hearing or from testifying in person at a Commission hearing shall be made in writing at least 14 days prior to the hearing and will be granted only upon a showing of good cause.

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Entered on this 23rd day of April, 2026. PUBLIC SERVICE COMMISSION

___________________________ Angie Hatton Chair

___________________________ Mary Pat Regan Commissioner

___________________________ Andrew W. Wood Commissioner

ATTEST:

______________________ Linda C. Bridwell, PE Executive Director

Case No. 2026-00070

APPENDIX A APPENDIX TO AN ORDER OF THE KENTUCKY PUBLIC SERVICE COMMISSION IN CASE NO. 2026-00070 DATED APR 23 2026

EKPC and the Member Cooperatives shall file prepared direct testimony and responses to the information requested in

Appendix B no later than .................................................................................... 05/15/2026

A person interested in becoming a party to this proceeding shall file a motion to intervene with the Commission pursuant

to 807 KAR 5:001, Section 4(11), no later than ................................................. 05/22/2026

All additional requests for information to EKPC and the Member Cooperative shall be filed

no later than ........................................................................................................ 06/08/2026

EKPC and the Member Cooperatives shall file responses

to additional requests for information no later than ........................................... 06/23/2026

Intervenor testimony, if any, in verified prepared form

shall be filed no later than .................................................................................. 07/08/2026

All requests for information to Intervenors shall be

filed no later than ................................................................................................ 07/22/2026

Intervenors shall file responses to requests for

information no later than..................................................................................... 08/05/2026

Last day for EKPC and its 16-Member Cooperatives or Intervenors to request a hearing or submit

this case for decision based on the record ........................................................ 08/19/2026

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APPENDIX B APPENDIX TO AN ORDER OF THE KENTUCKY PUBLIC SERVICE COMMISSION IN CASE NO. 2026-00070 DATED APR 23 2026

COMMISSION STAFF'S FIRST REQUEST FOR INFORMATION TO

EAST KENTUCKY POWER COOPERATIVE, INC. AND EACH OF ITS MEMBER COOPERATIVES

East Kentucky Power Cooperative, Inc. (EKPC) and EKPC's 16-member

distribution cooperatives (Member Cooperatives), pursuant to 807 KAR 5:001, are to file 4 with the Commission an electronic version of the following information. The information requested is due on May 15, 2026. The Commission directs EKPC and each of its

Member Cooperatives to the Commission's July 22, 2021 Order in Case No. 2020-00085 5 regarding filings with the Commission. Electronic documents shall be in portable document format (PDF), shall be searchable, and shall be appropriately bookmarked. Each response shall include the question to which the response is made and shall include the name of the witness responsible for responding to the questions related to the information provided. Each response shall be answered under oath or, for representatives of a public or private corporation or a partnership or association or a governmental agency, be accompanied by a signed certification of the preparer or the

Big Sandy Rural Electric Cooperative Corporation, Blue Grass Energy Cooperative Corporation, 4 Clark Energy Cooperative, Cumberland Valley Electric, Farmers Rural Electric Cooperative Corporation, Fleming-Mason Energy, Grayson Rural Electric Cooperative Corporation, Inter-County Energy Cooperative, Jackson Energy Cooperative, Licking Valley Rural Electric Cooperative Corporation, Nolin Rural Electric Cooperative Corporation, Owen Electric Cooperative, Salt River Electric, Shelby Energy Cooperative, South Kentucky Rural Electric Cooperative Corporation and Taylor County Rural Electric Cooperative Corporation. Case No. 2020-00085, Electronic Emergency Docket Related to the Novel Coronavirus COVID19 5 (Ky. PSC July 22, 2021), Order (in which the Commission ordered that for case filings made on and after March 16, 2020, filers are NOT required to file the original physical copies of the filings required by 807 KAR 5:001, Section 8).

Page 1 of 5

person supervising the preparation of the response on behalf of the entity that the

response is true and accurate to the best of that person's knowledge, information, and

belief formed after a reasonable inquiry. EKPC and each of its Member Cooperatives shall make timely amendment to any prior response if EKPC and each of its Member Cooperatives obtain information that indicates the response was incorrect or incomplete when made or, though correct or complete when made, is now incorrect or incomplete in any material respect. For any request to which EKPC and each of its Member Cooperatives fail or refuse to furnish all or part of the requested information, EKPC and each of its Member Cooperatives shall provide a written explanation of the specific grounds for its failure to completely and precisely respond. Careful attention shall be given to copied and scanned material to ensure that it is legible. When the requested information has been previously provided in this proceeding in the requested format, reference may be made to the specific location of that information in responding to this request. When applicable, the requested information shall be separately provided for total company operations and jurisdictional operations. When filing a paper containing personal information, EKPC and each of its Member Cooperatives shall, in accordance with 807 KAR 5:001, Section 4(10), encrypt or redact the paper so that personal information cannot be read.

1. This question is addressed to EKPC. Prepare a summary schedule showing the calculation of E(m) and the surcharge factor for the expense months under review. Form 1.1 can be used as a model for this summary. Include the two expense months subsequent to the review period in order to show the over- and under-recovery

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adjustments for the months included for the review period. Include a calculation of any additional over- or under-recovery amount EKPC believes needs to be recognized for the six-month review. Provide the schedule and all supporting calculations and documentation in Excel spreadsheet format with all formulas, columns, and rows unprotected and fully accessible.

1. This question is addressed to EKPC and the Member Cooperatives. For each of the Member Cooperatives, prepare a summary schedule showing the Member

Cooperative's pass-through revenue requirement for the months corresponding with the

six-month review. Include a calculation of any additional over- or under-recovery amount the Member Cooperative believes needs to be recognized for the six-month review. Provide the schedule and all supporting calculations and documentation in Excel spreadsheet format with all formulas, columns, and rows unprotected and fully accessible.

1. This question is addressed to EKPC. Refer to Form 2.3, Inventory and
   Expense of Emission Allowances the six-month review period under review.

2. For the sulfur dioxide emission allowance inventory, explain the
   reason(s) for all purchases of allowances reported during these expense months.

3. For the nitrogen oxide emission allowance inventory, explain the
   reason(s) for all purchases of allowances reported during these expense months.

4. Explain how the purchases of allowances in the expense months
   under review comply with EKPC's emissions allowance strategy plan.

5. This question is addressed to EKPC. Refer to Form 2.5, Operating and
   Maintenance Expenses, for the last six expense months under review. For each of the expense account numbers listed on this schedule, explain the reason(s) for any change

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in the expense levels from month to month if that change is greater than plus or minus 10 percent.

1. This question is addressed to EKPC. The Settlement Agreement approved in Case No. 2004-00321 provides that EKPC's rate of return on compliance-related 6 capital expenditures will be updated to reflect current average debt cost at the conclusion of the surcharge review period. Provide the following information as of November 30,

2025.

1. The debt issuances directly related to projects in the approved
   compliance plan and corresponding outstanding balances of each debt issuance;

2. The debt cost for each debt issuance directly related to the projects
   in the approved compliance plan, and whether the debt cost is a fixed or variable rate;

3. EKPC's calculation of the weighted average debt cost and the rate
   of return resulting from multiplying the weighted average debt cost by a 1.50 Times Interest Earned Ratio (TIER), including all supporting calculations showing how the weighted average debt cost was determined; and

4. Provide all schedules and supporting calculations and
   documentation in Excel spreadsheet format with all formulas, columns, and rows unprotected and fully accessible.

5. This question is addressed to each of the Member Cooperatives. For your
   particular Member Cooperative, provide the actual average residential customer's

monthly usage for the 12 months ending November 30, 2025. Based on this usage

Case No. 2004-00321, Application of East Kentucky Power Cooperative, Inc. for Approval of an 6

Environmental Compliance Plan and Authority to Implement an Environmental Surcharge (Ky. PSC

Mar. 17, 2005).

Page 4 of 5 Case No. 2026-00070

amount, provide the dollar impact any over- or under-recovery will have on the average

residential customer's monthly bill for the requested recovery period.

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Service List for 2026-00070

• Farmers R.E.C.C. Farmers R.E.C.C. 504 South Broadway P. O. Box 1298 Glasgow, KY 42141-1298
• Big Sandy R.E.C.C. Big Sandy R.E.C.C. 504 11th Street Paintsville, KY 41240
• Fleming-Mason Energy Cooperative, In Fleming-Mason Energy Cooperative, Inc. 1449 Elizaville Road P. O. Box 328 Flemingsburg, KY 41041
• Nolin R.E.C.C. Nolin R.E.C.C. 411 Ring Road Elizabethtown, KY 42701-6767
• South Kentucky R.E.C.C. South Kentucky R.E.C.C. 200 Electric Avenue Somerset, KY 42501
• Clark Energy Cooperative, Inc. Clark Energy Cooperative, Inc. 2640 Ironworks Road P. O. Box 748 Winchester, KY 40392-0748

• Cumberland Valley Electric, Inc.
  Cumberland Valley Electric, Inc. Highway 25E P. O. Box 440 Gray, KY 40734

• East Kentucky Power Cooperative, Inc. 4775 Lexington Road P. O. Box 707 Winchester, KY 40392-0707

• Denotes served by Email

• Inter-County Energy Cooperative Corp Inter-County Energy Cooperative Corporation 1009 Hustonville Road P. O. Box 87 Danville, KY 40423-0087

• Jackson Energy Cooperative Corporati Jackson Energy Cooperative Corporation 115 Jackson Energy Lane McKee, KY 40447

• Licking Valley R.E.C.C. Licking Valley R.E.C.C. P. O. Box 605 271 Main Street West Liberty, KY 41472

• Owen Electric Cooperative, Inc. Owen Electric Cooperative, Inc. 8205 Highway 127 North P. O. Box 400 Owenton, KY 40359

• Shelby Energy Cooperative, Inc. Shelby Energy Cooperative, Inc. 620 Old Finchville Road Shelbyville, KY 40065

• Salt River Electric Cooperative Corp
  Salt River Electric Cooperative Corp. 111 West Brashear Avenue P. O. Box 609 Bardstown, KY 40004

• Blue Grass Energy Cooperative Corp. Blue Grass Energy Cooperative Corp. 1201 Lexington Road P. O. Box 990 Nicholasville, KY 40340-0990

• Grayson R.E.C.C. Grayson R.E.C.C. 109 Bagby Park Grayson, KY 41143

• Taylor County R.E.C.C. Taylor County R.E.C.C. 625 West Main Street P. O. Box 100 Campbellsville, KY 42719

• Denotes served by Email Service List for Case 2026-00070