Louisville Gas & Electric and Kentucky Utilities request rate adjustment
Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU) companies’ will request a rate adjustment from state regulators to reflect rising costs for cybersecurity and outside labor and the investments in the utilities’ systems.
“Making the decision to request a rate adjustment in this difficult economic period was carefully considered and even delayed two months to help allow more economic recovery,” Paul Thompson, LG&E and KU President and CEO, said. “However, for us to continue to provide the service on which our customers rely, we are at a point where we must ask the Kentucky Public Service Commission to review our rates based on the increasing costs to serve our customers.”
The rates would go into effect in mid-2021 if approved. LG&E and KU plan to file for review by the KPSC on Nov. 25.
“In addition to having more economic recovery occur before new rates would go into effect mid-2021, we hope to temper the initial increase in customer bills by also requesting approval of a $53 million ‘Economic Relief Surcredit’ that would help to mitigate the impact of the rate adjustment until mid-2022. Additionally, pending the outcome of this proceeding, it’s our goal not to request another base rate adjustment for several years.”
If approved, KU residential customers using an average of 1,120 kWh per month would see an increase of $12.09 in their total monthly electric bill for the first 12 months after the ruling. When the relief credit expires in mid-2022, a KU residential customer using the same amount of energy would see their monthly bill increase approximately 76 cents.
LG&E residential electric customers using an average of 894 kWh per month would see an increase in their total monthly bill of $8.67 for the first 12 months after the ruling. An LG&E residential customer using the same amount of energy would see the additional monthly increase of $3.07 when the relief credit expires in mid-2022.
LG&E residential natural gas customers using an average of 54 Ccf per month would see an increase of $5.83 in their total monthly bill for the first 12 months following the ruling and the additional monthly increase of 34 cents in mid-2022.
Officials point out that the rates will still be among the lowest in the nation. LG&E’s rates are 17 percent lower than the national average, while KU’s rates are 22 percent below the national average.
Among its investments, the companies have upgraded lines; replaced aging wooden poles with steel; installed new circuit breakers and substation equipment; conducted vegetation management; and deployed advanced technology that immediately pinpoints the location of power outages. As a result of these efforts, outage frequency and duration have been reduced by 20 percent over the past decade.
Across its natural gas system, LG&E is replacing aging steel gas lines; making upgrades to compressor stations and underground storage facilities; and following comprehensive safety protocols that include using in-line inspection tools, robotic sensors, and leak detection surveys.
