PSC move might allow higher KU rates

The state Public Service Commission on Wednesday approved a request by Kentucky Utilities that could eventually lead to a rate increase linked to the utility's cleanup costs from this past winter's ice storm.

Earlier this year, the company asked the PSC to agree that the storm's costs are the type of costs that can be passed along to customers through a rate increase. On Wednesday, the commission agreed they were and said they would be tracked separately from other operations.

Under KU's proposal earlier this year, it would eventually raise bills $1.55 a month for the typical residential customer using 1,000 kilowatt hours. The increase would be for five years, which is the time KU says it would take to recover the full costs from the storm.

KU spokeswoman Chris Whelan said the utility has not yet decided when it might request an increase in rates.

It cost KU about $62 million to restore power during the ice storm, which left 199,000 customers without power at the peak of the outages.

The company also plans to eventually ask for a rate increase to recover costs related to last year's windstorm, which would be 10 cents a month, Whelan said earlier this year. The PSC previously ruled that damage from the windstorm could also be tracked separately.

"Whether these storm costs are fully reflected in rates remains to be seen," said PSC spokesman Andrew Melnykovych.

He said that determination would be made whenever KU files its next application for a rate adjustment.