Kentucky Utilities next week will file an application to the Kentucky Public Service Commission for another rate increase.
KU is seeking a rate hike that will more than double the basic monthly service charge for residential customers while slightly lowering the charge per kilowatt hour. The average residential user should expect an additional cost of 5.94 percent – $7.16 on each month’s bill – if the adjustment is approved, according to KU. Currently, the average residential bill is around $113 per month.
KU is asking for the rate adjustment to take effect Jan. 1. The application to the PSC will be submitted Wednesday, according to legal advertisements in area newspapers.
The need arises from a $103.1 million investment in the utility’s infrastructure to “improve safety, reduce outage times and enhance service to customers.” That $2.2 billion upgrade, which includes improvements for KU’s partner-utility Louisville Gas & Electric Co., began in July and is expected to continue through June 2018.
The utilities are planning to install intelligent control equipment on the distribution system that serves homes and neighborhoods, and similar equipment on the high-voltage transmission systems that connect to the national grid.
“While these types of technology won’t eliminate interruptions to service, we will be able to more efficiently isolate the outages and more quickly identify where they are located so the impact on our customers can be reduced,” said Paul W. Thompson, LG&E and KU chief operating officer. “Advanced meters alone offer a host of benefits from a customer and company perspective.”
The service charge for basic residential service, according to KU’s plan, will jump from $10.75 per month to $22. Meantime, the kWh charge will drop from 8.87 cents to 8.523 cents. Rates for schools, retail customers, volunteer fire departments and an array of other services would also be adjusted under the proposal to the PSC.
In August, the PSC approved a rate increase to cover mandated environment upgrades. That brought a monthly surcharge of 30 cents in 2016, and subsequent monthly surcharges will increase annually as high as $3.32 per month through 2024.
KU claims it has worked hard to maintain low rates, which are reportedly as much as 25 percent lower than national averages. If approved, KU rates would remain among the lowest in the nation, a news release stated.
“We are always thoughtful before taking any action that could impact customers’ bills, and we believe these improvements are an important step in reducing the amount of time our customers will be impacted by weather-related or other outages,” said Victor A. Staffieri, chairman, CEO and president of LG&E and KU.
There is not yet a time table on when the PSC will rule on the adjustment request.
KU serves 546,000 customers in 77 Kentucky counties.