LOUISVILLE, Ky. (WDRB) – When Louisville Gas & Electric sought approval from Kentucky regulators for a Bullitt County gas pipeline in 2016, the project’s estimated cost was $27.4 million.
The projected price tag now stands at $74.2 million, according to documents filed in recent months with the Kentucky Public Service Commission. That amounts to a nearly threefold increase in less than five years.
LG&E officials told commission members in hearings this spring that the current estimate includes “a significant amount of contingency costs” and also factors in the potential for construction delays from weather and other reasons.
They also said the company “expects bids were influenced by LG&E’s inability to specify a start date for construction due in part to the outstanding rights-of-way.”
A Bullitt County judge ruled last month that the utility can condemn land using eminent domain, a win in seven cases in which landowners in the pipeline path refused to sell easements. A separate case involving Bernheim Arboretum and Research Forest is pending in Bullitt Circuit Court.
The biggest cost for the project is paying contractors, according to estimates filed with state regulators. In all, “contract labor” would account for $62.7 million of the overall cost.
Real estate and right-of-way costs, such as paying property owners to take their land, are just over $4 million.
Given the pipeline’s cost increase, Public Service Commission staff asked LG&E in May why the agency shouldn’t review the key approval granted in 2017 that let the utility move forward with its plans.
LG&E officials argued that no such review of the Certificate of Public Convenience and Necessity is needed, saying that the initial capacity and reliability reasons for the pipeline still remain. The utility has said more than 400 homes, businesses and other customers have been denied new or existing natural gas service since 2019.
“The denials of service will continue until the pipeline is constructed,” Chief Operating Officer Lonnie E. Bellar and Vice President of State Regulation and Rates Robert M. Conway wrote in response. “There is no credible suggestion that the additional capacity is not necessary to provide requests for new service or existing safe and reliable service.”
Bellar and Conway said LG&E’s analysis continues to show that the pipeline proposal is the “least-cost alternative” for serving the area, and that the utility will seek new bids for construction to get lower costs.
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