KU and LG&E asking for another electricity rate hike. It’s the third in four years.
Kentucky Utilities and Louisville Gas & Electric are asking for permission to charge customers higher prices for electricity and natural gas. It would be their third set of rate hikes authorized in the last four years.
KU and LG&E — both owned by PPL Corp. of Allentown, Pa. — this week publicized the details of their latest request, which is pending before the Kentucky Public Service Commission.
KU wants $172.3 million a year in new revenue from selling electricity. The average residential customer would see an increase of $12.09 in her monthly electric bill for the first year once the higher rates were approved. After a proposed “relief credit” expired in mid-2022, her monthly bill would rise again by about 76 cents.
KU serves 77 counties across Kentucky, including Lexington and its suburbs.
LG&E wants an additional $138.2 million a year in electricity revenue and $23.5 million a year in natural gas revenue. The average residential customer would see an increase of $8.67 in her monthly electricity bill for the first year and an increase of $5.83 in her monthly natural gas bill. After the relief credits expired, her monthly bills would climb by $3.07 and 34 cents for electricity and natural gas, respectively.
LG&E sells electricity to nine counties in the Louisville area and natural gas to 17 counties.
The rate hikes are regrettable but necessary to pay for significant upgrades to the utilities’ infrastructure, said the companies’ chief executive officer, Paul W. Thompson, in a prepared statement. The companies also face escalating costs in all of their business operations, Thompson said.
In 2019, Thompson’s total compensation was $2.72 million in salary, bonuses, stock options and other payments, according to public documents.
“Making the decision to request a rate adjustment in this difficult economic period was carefully considered and even delayed two months to help allow more economic recovery,” Thompson said. “However, for us to continue to provide the service on which our customers rely, we are at a point where we must ask the Kentucky Public Service Commission to review our rates based on the increasing costs to serve our customers.”
Apart from price increases, KU and LG&E also have asked the PSC to reduce how much they must pay residential customers with solar panels for the surplus electricity they sell back onto the grid.
These revised “net metering” terms only would affect new customers who want to begin selling back their solar power, not existing customers who already sell power from their solar panels, the companies said.
Following intensive lobbying by the utility industry, the Kentucky General Assembly last year authorized the PSC to set less generous terms on a company-by-company basis for future net metering customers. Previously, utilities had to pay the same rate for surplus solar power as they charged when selling electricity to residential customers
The PSC is expected to take months to review the companies’ rate request. Two parties already have intervened in the case: the Kentucky Office of the Attorney General, representing consumers, and the Kentucky Industrial Utility Customers, representing major manufacturers in the state that use a lot of electricity, such as Toyota.
The PSC last approved rate hikes for KU and LG&E in April 2019. KU was allowed to collect an additional $55.88 million in annual revenue, but that was less than half of the $112.46 million the company originally requested.
Prior to that, the companies were awarded base rate increases in June 2017.
