Deal reached on water rate hike

A tentative settlement has been reached in Kentucky American Water's request for a 30 percent rate increase, but no one involved is saying what it is.

It probably means that the water company won't get as much as it asked for.

In a document filed with the Public Service Commission Friday, the state attorney general's office said the agreement was reached "consequent to discussions held on 12 March."

The filing also said the attorney general and the utility have contacted other parties in the case and anticipate that an agreement will be presented to the PSC "in the next few days."

The PSC must approve any settlement. A hearing on the rate case tentatively had been scheduled for April 14. If there is an agreement, the commission would hear details on that day.

Representatives for both the water company and the attorney general declined to comment, as did the city of Lexington and the Community Action Council, which had intervened in the case.

Kentucky American's last rate increase request ended in a settlement with the state attorney general. The company has requested a 29 percent increase. The December 2007 settlement allowed a 17 percent increase.

When the current increase request was filed, Kentucky American said it would bring in an additional $18.5 million a year.

Nearly half of that, the company said, would be the first installment on a 20 million-gallon-a-day treatment plant and pipeline. The $162 million project includes the plant on the Kentucky River north of Frankfort and a 31-mile underground pipeline to bring water to Lexington.