Attorney General seeks to limit LG&E, KU rate increase

Attorney General Andy Beshear wants Louisville Gas & Electric and Kentucky Utilities to get only about one-third of the rate increase the utilities are asking the state Public Service Commission to approve.

Beshear said Thursday in a release that his Office of Rate Intervention is recommending that the PSC reduce the rate request from $210 million in annual revenues to $142 million.

Beshear said his office’s rate proposal incorporates the testimony of five experts, including an engineer.

Beshear’s Office of Rate Intervention serves as a watchdog for consumers in matters relating to health insurance, natural gas, water, sewer, electric and telephone rates. Under Kentucky law, the office is responsible for representing the interests of Kentucky consumers before governmental rate-making agencies, concentrating on utility cases before PSC.

“My office clearly understands the need for utility companies to maintain their infrastructure to better serve ratepayers,” Beshear said. “In this instance, we view the requested increase by the utility companies to be excessive and are asking the PSC to take the appropriate action so that any cost passed to consumers isn’t crippling.”

Beshear’s office is also recommending that the fixed customer charge remain the same with no additional increase and eliminate the fixed charge “gas line tracker rider.” The charge as originally proposed was for a one-time, short-term recovery for a specific project. Now the companies want to use the tracker for long-term projects to enable them to collect construction expenses from ratepayers between rate cases.

Beshear is also recommending the PSC reject the proposed smart meter deployment, which will cost customers more than $350 million over the life of the meters.

“After careful review of the filings in this case, we find little support that smart meter deployment will benefit the ratepayers in any way,” Beshear said.

Other recommendations by Beshear’s office include delaying a smart grid project, asking the PSC to reduce proposed transmission spending in an attempt to keep costs for customers down and recommending a much lower authorized return for shareholders than proposed by the company.

A public hearing on the matter is scheduled for May 2 at the PSC in Frankfort.

KU and its parent company, LG&E Energy, are owned by Pennsylvania-based PPL Corp.

This story was originally published March 9, 2017 at 4:25 PM with the headline "Attorney General seeks to limit LG&E, KU rate increase."