Kentucky PSC approves majority of proposed KU/LG&E demand-side management programs

The Kentucky Public Service Commission (PSC) recently authorized all but one of the demand-side management (DSM) programs proposed by Kentucky Utilities Co. and Louisville Gas & Electric Co. (KU/LG&E).

The PSC found that although many of the programs cost more than they save, they provide other benefits that justify their continuation.

The approved programs include a weatherization program for low-income customers, a demand-reduction program for large non-residential customers, and a rebate program to incentivize large non-residential customers to install equipment that reduces energy usage. Also included is a demand-reduction program that provides a rebate to customers that place a device on certain appliances that allow the utility to turn them off briefly during times of high demand.

The approved changes will reduce the monthly DSM surcharge for a typical Kentucky Utilities residential customer by approximately $1.64. For a standard Louisville Gas & Electric residential electric customer, the monthly surcharge will decrease by about 97 cents. The programs are approved for continuation through 2025.

Under the PSC order, KU/LG&E will continue a pilot program that offers smart meters to residential and small commercial customers.

The PSC directed KU/LG&E to end a program that provides funds to schools for hiring energy managers. The commission found that the program was not cost-effective.

KU/LG&E also proposed the discontinuation of several existing programs that were no longer cost-effective. The utilities noted that customers are reducing electricity consumption on their own by purchasing more energy efficient consumer goods, which makes it harder to justify spending on DSM programs. The PSC approved the discontinuation of the programs.

The PSC also approved the expansion of several DSM programs and the DSM surcharge for industrial customers. Under certain conditions, industrial customers will be able to opt out.