KU asks state for rate increase

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Public Service Commission considers request

By The Staff

Kentucky Utilities residential customers could see a nearly 14 percent increase in their bills this year.

Citing a growing customer demand as the main culprit, with a 2008 windstorm and 2009 ice storm as contributing factors, KU has asked the Public Service Commission to grant a rate increase.

According to information provided by Cliff Feltham, KU’s statewide media relations manager, the company is requesting a $136 million base rate increase, which the company says is necessary to meet growing demand.

KU and its sister company, Louisville Gas and Electric Co., have invested more than $1.2 billion in additional generation and infrastructure improvements to ensure safe and reliable service. In addition, the utilities invested more than $133.7 million following storms in 2008 and 2009. The companies are requesting that the costs associated with the 2008 windstorm and the 2009 ice storm be spread over the next five years.

If the request is approved, the basic monthly residential service charge will increase $10, while the kilowatt-hour rate increases about 2 percent.

If the increase is approved, KU officials say the company’s residential rate will remain lower than the U.S. average, as well as the average rate of the seven states surrounding Kentucky.

According to a KU news release, a residential KU customer using an average of 1,230 kilowatt hours, is expected to see an increase of $11.85 per month, based on the total residential increase of 13.7 percent.

For schools that are all electric, the kilowatt hour rate would increase about 10 percent. The monthly service charge would rise $15 to $90.

Industrial service charges would increase from $120 to $500 monthly. The kilowatt hour rate would increase about 5 percent.

The process

The PSC’s review process is a lengthy one.

‘“KU filed on Jan. 29. That means a decision has to be reached by the end of November,’” said Andrew Melnykovych, Kentucky PSC director of communications.

Essentially, Melnykovych said, the PSC must decide whether the rates are fair, just and reasonable.

The process begins with an application submitted to the PSC. Once the application period is complete, the PSC has 10 months to reach a decision, Melnykovych said.

‘“The applied-for rates are suspended for a period of five months,’” he said. ‘“If, after five months, the PSC has not reached a decision, the utility may put the rates into place, subject to refund. If the rates ultimately granted by the PSC are lower, the utility must refund the difference to customers, with interest.’”

Submit comments to Public Service Commission, 211 Sower Blvd., P.O. Box 615, Frankfort, Ky., 40601; fax to (502) 564-3460 or e-mail to psc.info@ky.gov.