KU customers can expect higher bills

Local News

February 9, 2009

Local News

By TRICIA NEAL, CJ Staff Writer The Commonwealth Journal Mon Feb 09, 2009, 06:34 AM EST

Customers of Kentucky Utilities Co. (KU) can expect to see higher bills in the near future.

The Kentucky Public Service Commission (PSC) on Wednesday accepted a settlement which will raise slightly the electric rates for KU and Louisville Gas and Electric Co. (LG&E;) customers. Gas base rates for LG&E; customers will be raised even more. The new rates became effective yesterday.

LG&E; and KU negotiated the settlement with the Office of Attorney General, the Kentucky Industrial Utility Customers, Inc., and several other parties, including advocates for low-income consumers.

The two companies filed for rate increases in July. KU asked for a base revenue increase of $22.2 million.

In the orders, the PSC said it had determined that the provisions of the agreement are “reasonable and in the public interest.”

A typical KU residential customer using 1,000 kilowatt hours per month will see an 11 cent increase in his or her monthly bill. LG&E;’s customers will see an approximately 21-cent increase.

The settlement agreement includes an $8.85 million revenue decrease for KU, coming through a decrease of less than one-tenth of a cent in the per-kilowatt-hour usage charge.

Also, the monthly per-meter charge assessed to fund a program to assist low-income customers with their bills will go up by a nickel, to 15 cents. LG&E; and KU will match the first $300,000 collected on a dollar-for-dollar basis. The company contribution will come from funds that would otherwise go to shareholders.

The new rates mark the end of separate credits to ratepayers to reflect savings resulting from the 1998 merger of LG&E; and KU. Anticipated future savings are reflected in the overall rates and will go entirely to ratepayers, rather than being split with shareholders.

The estimated 11-cent increase for KU customers does not include bill components which fluctuate monthly, such as fuel adjustments and environmental costs.

The PSC said that it has received numerous public comments in opposition to the rate increases. The PSC noted that it has, for several years, encouraged LG&E; and KU to contribute shareholder funds to the low-income energy assistance program funded by the customer fee.

“Especially in today’s economic conditions, the Commission compliments (the companies) for making this commitment of shareholder dollars to assist its low-income customers in making payments on, and maintaining, their utility service,” the PSC said in the orders.

KU has 504,000 customers in 77 Kentucky counties. LG&E; has about 401,000 electric customers in nine counties and 308,000 natural gas customers in 21 counties.

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