PSC allowing Lovelaceville Water Company to cease operations

Service to customers ends on Feb. 2, 2015

LOVELACEVILLE, Ky. (Oct. 31, 2014) — The Kentucky Public Service Commission (PSC) has given permission for Lovelaceville Water Company to cease operations and close and abandon its system.

Service to any remaining customers will end on Feb. 2, 2015.

READ MORE: A public hearing was held on Sept. 19

In an order issued today, PSC said it wants Lovelaceville Water customers to have enough time to make alternative arrangements for water service. Those could include drilling wells or installing cisterns.

PSC found that the deteriorating physical and financial condition of Lovelaceville Water made it impossible for the company to continue operations. Thorough efforts to find another entity willing to either operate or take over the system yielded no results, the PSC said.

Obstacles to continued operation of the utility include the need to completely overhaul the system, a dwindling customer base that makes it impossible to raise enough revenue through rates and an inability to obtain financing, the PSC said.

As a privately owned for-profit entity, Lovelaceville Water is not eligible for the grants or low-interest loans available to non-profit rural water systems, the PSC noted.

Lovelaceville Water filed an abandonment petition with the PSC in March, seeking authorization to shut down the system, which had about 55 customers at the time.

Since then, the number of customers has fallen to 42, largely because of customers installing wells in anticipation of the utility being abandoned. Of the remaining customers, only about 25 are current on their bills, owner Eric Young stated in testimony before the PSC.

Among the technical problems faced by the company is the inability to permanently disconnect customers who are not paying their bills. Young told the PSC that customers he has disconnected for non-payment frequently restore service themselves.

Before authorizing the abandonment of Lovelaceville Water, PSC contacted several utilities in neighboring counties. All cited the size, condition or location of the system as reasons for being financially unable to operate or acquire Lovelaceville Water.