LOUISVILLE, Ky. (WDRB) – Kentucky regulators approved a request by Louisville Gas & Electric and Kentucky Utilities to let the energy companies potentially make ratepayers cover some costs from the early March windstorm.
The Public Service Commission’s order on Wednesday came the same day that a new round of severe weather battered parts of the Louisville area, spawning tornadoes and leaving thousands without power.
LG&E and KU asked the commission in mid-March to let them recover some costs related to restoring service after the March 3 storm. Those expenses are estimated at $23.2 million, with $10.9 million for work in LG&E’s service territory that includes areas in and around Louisville.
That amount was more than double LG&E’s typical $4.6 million cost to fix storm-damaged infrastructure, according to the utilities’ filing with the commission.
LG&E/KU and other utilities can ask state regulators to use future rate increases to offset such extraordinary expenses – known as regulatory assets – when the price tag to repair damaged poles, wires and distribution circuits and other equipment couldn’t have been foreseen.
More than 350,000 LG&E customers lost power during the March storm, according to company estimates. Between LG&E and KU, about 68 percent of all distribution circuits were affected, the PSC filing said.
In all, the companies told regulators that the storm had the third biggest impact in the last 20 years, trailing only the ice storm of 2009 and the windstorm caused by the remnants of Hurricane Ike in September 2008.
“There are costs associated with making repairs to make sure that customer service is back up and running as quickly and safely as possible,” LG&E/KU spokeswoman Natasha Collins said. “And so we have to account for those – and there is no utility insurance for large storms like that.”
The Public Service Commission would determine whether to let the utilities pass through the storm costs during the next request to change basic rates for customers. Collins said that wouldn’t happen before 2026.
Collins said the companies have “typically been granted recovery of 100 percent of the expenses that we’ve requested be recovered.”
LG&E last got commission approval to recover higher-than-usual storm costs of $6.3 million following an ice storm in November 2018 that at its peak left 100,000 customers without power.
Collins said it’s too early to say if expenses from restoration work from this week’s storms also could qualify for the rate recovery.
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