PSC approves revised rate hike for KU, LG&E starting July 1st - WDRB 41 Louisville News

PSC approves revised rate hike for KU, LG&E starting July 1st

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FRANKFORT, Ky. (WDRB) -- Rates are going up for Louisville Gas & Electric and Kentucky Utilities customers, but it won't be as much as first thought. 

The Kentucky Public Service Commission gave the green light to a requested rate increase, but the commission reduced the amount of the increase agreed upon in an earlier settlement. 

The PSC ruled that the utilities could not raise rates to cover employee retirement benefits, and it reduced the amount of earnings for investors. But the commission did approve a plan to have LG&E and KU hear public concerns over their proposed launch of Advanced Metering Infrastructure.  The AMI or "smart meters" can be read remotely and would automate the process of locating outages. 

The new rates the PSC calls "fair, just and reasonable" will take effect July 1, 2017.  The typical LG&E residential electric bill will increase by about $6.42 per month. The monthly bill for a typical KU residential customer will increase by about $3.85.

LG&E residential natural gas customers will see an increase of about $6.98 per month in base rate charges, although a portion of that will be offset by a reduction of nearly $5 per month in a surcharge that pays for gas line safety improvements. The utilities can adjust the price of gas every three months for market fluctuations in gas prices. 

Both LG&E and KU had the last base rate increases took effect in July 2015.

Kentucky Utilities has about 516,000 electric customers in 77 counties across Kentucky. Louisville Gas & Electric has about 403,000 electric customers in nine counties in the Louisville area and 322,000 natural gas customers in 17 counties.

With the PSC's changes, KU will receive an additional $50.5 million in revenue per year, less than half the amount requested by the utility, and about $4.4 million less than allowed by the settlement. KU's annual revenue will increase about 3.1 percent. 

LG&E's base rate electric revenue will increase by about $56.3 million - about 5 percent. The utility had requested an additional $93.6 million in annual electric revenue, and had agreed to $59.4 million in the settlement. 

LG&E had requested an increase in its annual revenue from natural gas operations of $13.8 million. The PSC set the increase at about $6.5 million, $1 million less than the amount in the settlement and less than half the original request. It will increase LG&E's revenue from gas operations by 2 percent.

With the PSC's changes, a typical LG&E residential electric bill will increase by about $6.42 per month. The monthly bill for a typical KU residential customer will increase by about $3.85.

LG&E residential natural gas customers will see an increase of about $6.98 per month in base rate charges, although a portion of that will be offset by a reduction of nearly $5 per month in a surcharge that pays for gas line safety improvements. The company can change the price of natural gas every three months based on market fluctuation.

KU and LG&E say the rate increase will pay for safety and reliability upgrades and the rehab of the hydroelectric generating capacity at McAlpine Dam in Louisville.
The PSC also approved LG&E's construction of a new natural gas pipeline in Bullitt County. The $27.6 million project will provide additional reliability for the gas supply to about 9,500 customers in a rapidly growing area in the eastern part of the county that is now served by a single line.

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