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PSC Approves Reduced LG&E/Kentucky Utilities Rate Increases

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The Kentucky Public Service Commission has approved a settlement reducing base rate increases sought by the Louisville Gas and Electric and Kentucky Utilities companies. 

Under the agreement, rates will increase for LG&E and KU customers, but will be smaller than those requested by the utilities late last year.  

The settlement leaves monthly residential customer charges unchanged, however LG&E natural gas customers will see delivery charges rise and KU customers will pay more for each unit of electricity they consume. 

Kentucky Utilities has about 512,000 electric customers in 77 counties across Kentucky. Louisville Gas & Electric has about 400,000 electric customers in nine counties in the Louisville area and 320,000 natural gas customers in 17 counties.

The two utilities filed the current cases on Nov. 26, 2014. The settlement agreement was filed with the PSC on April 20, 2015. An evidentiary hearing on the settlement was held the following day. The PSC conducted earlier public comment meetings in Lexington and Louisville.

The settlement grants KU an additional $125 million in revenue per year, about 81.7 percent of the amount requested by the utility, and an increase in annual revenue of about 7.9 percent. LG&E’s base rate electric revenue will not increase. The utility had requested an additional $30 million in annual electric revenue, or about 2.7 percent.

LG&E had requested an increase in its annual revenue from natural gas operations of $14 million, or about 4.2 percent. The settlement sets the increase at $7 million.

Much of the electric rate increase will pay for the $563 million gas-fired electric power plant being built at the Cane Run station in western Jefferson County. The 640-megawatt plant, which went into service earlier this month, is replacing a coal-fired plant at the same location.

Kentucky Utilities owns 78 percent of the plant, which is why the proposed rate increase was higher for KU than for LG&E. The utilities stated that the rate increase also will pay for expanded hydroelectric generating capacity at McAlpine Dam in Louisville and a new solar-powered generating facility in Mercer County.

Rob Canning is a native of Murray, KY, a 2015 TV Production grad of Murray State. At MSU, he served as team captain of the Murray State Rowing Club. Rob's goal is to become a screenwriter, film director or producer and looks to the likes of Quentin Tarantino and Guy Ritchie for inspiration. He appreciates good music, mainly favoring British rock n' roll, and approves of anything with Jack White's name on it. When not studying, rowing or writing, Rob enjoys spending his free time with a book or guitar.
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