Kentucky American Water, which provides water for Lexington and 10 nearby counties, filed an application with the state’s Public Service Commission Friday to raise rates. A rate increase hasn’t been approved by the commission since 2013.
Average residential customers would be expected to pay 17 percent more, or about $6, based on averages provided in the filing. A current average residential bill is $34 monthly, according to the utility. Commercial customers would pay 12 percent more on average.
Kentucky American Water said in the filing that current rates are “unfair, unreasonable, and unjust” and not providing the company with a high enough rate of return.
Like other utilities, the water company has had a drop in sales, Linda Bridwell, manager of rates and regulation for Kentucky and Tennesee, testified. Bridwell pointed to a number of factors for the sales slump including: water efficient plumbing fixtures and appliances, customers’ conservation efforts and conservation programs implemented by government agencies.
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The company need the increase because of repairs and upgrades to the water company’s facilities and equipment, Birdwell said.
Kentucky American Water’s investment in water system improvements of about $79 million is the primary driver behind the rate request. Among these improvements is the construction of a $15 million filtration building at the utility’s Richmond Road Station water treatment plant in Lexington. That building started construction in 2014 and is scheduled to be completed this year.
“It is clear that the general public does not understand the immediacy of the problem or the substantial cost to fix the problem,” she said. But Mayor Jim Gray said in a statement: "This would be the fifth water rate increase in 10 years. If the Public Service Commission grants this latest request we will be paying 80 percent more for water than we were in 2006. It's time for the Commission to say no."
What Do You Think?
The public can send comments on proposed rate hike by mail to the Public Service Commission or through its website.