The Kentucky Public Service Commission (KPSC) has granted base rate increases to Louisville Gas & Electric Co. and Kentucky Utilities Co., but at lower levels than those agreed to earlier by the utilities and other parties to the cases.
With the KPSC’s changes, KU’s annual revenue will increase by 3.1 percent, or roughly $50.5 million in revenue per year, which is less than half of the amount requested by the utility and roughly $4.4 million less than that allowed by the settlement. The increase for the typical monthly bill of a KU residential customer, using an average of 1,179 kilowatts per month, is estimated at $3.85.
The monthly electric basic service charge for LG&E and KU, included in the aforementioned increase, will be $12.25 and will not be staggered over two years, as previously agreed during the settlement.
The new rates will take effect on July 1.
The KPSC ruling disallowed the utilities from reflecting certain utility employee retirement benefits in rates and also slightly reduced the level of authorized earnings for each utility’s investors, from 9.75 percent to 9.7 percent. The ruling also ordered that a $1.5 pilot program providing lower rates to schools that participate in energy efficiency measures should be made available to private schools as well as public schools.
Provisions of the settlement that were left unchanged include an agreement by KU and LG&E to withdraw their proposal for a system-wide deployment of smart meters and a decision to study the issue further; the establishment of a pilot rate for sports field lighting that will reflect the usage pattern of such facilities; and continuation of a program to assist low-income ratepayers.
"While we are still reviewing the details of the order, the ruling gives us the ability to enhance our reliability and continue providing safe and reliable service to our customers while mostly meeting the needs of the parties to this case," said Kent Blake, LG&E and KU chief financial officer, in a release on the KPSC ruling.
Kentucky Utilities has roughly 516,000 electric customers in 77 counties across Kentucky.