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Residents Argue LG&E Rate Increase Would Burden the Poor, Stifle Energy Efficiency

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Kentucky state regulators are set to consider whether to raise Louisville-area utility bills, in response to a proposed rate increase by Louisville Gas and Electric. The Public Service Commission held a public meeting last night to take comments; about 50 people showed up, and unsurprisingly, no one testified in favor of the rate increase.

LG&E’s proposal would increase the monthly service charge customers pay for electricity from $10.75 to $18. The monthly gas meter fee would increase too—from $13.50 to $19. The actual rates customers pay for the electricity and gas will decrease slightly. The company estimates that the bill for the average residential electric customer would increase by about $2.75—for gas, the bills will rise by about $2.62. The company says it need the money to pay for several projects, including building a new natural gas power plant at Cane Run.

The arguments made at the public meeting against the proposal were varied, but many fell in three main camps: the rate increase would be a burden for low-income residents, and those on fixed incomes; the change would discourage energy efficiency measures; and it could stifle the growth of renewable energy in the state.

“Who gets a 67 percent raise?” Doug Belongia of Prospect asked the commissioners, referencing the 67 percent proposed increase in monthly charges. “Has anyone in this room gotten 67 percent added to your wages in the past 10 years? Well then which one of you gentlemen can explain to me why you should get a 67 percent raise in any rate of any kind?”

Iroquois resident Tammy Stewart told the commissioners that she makes $19,000 a year, and already struggles to pay her monthly bills. “When will you all tell them no?” she asked about LG&E. “It’s not fair for them to always get their increase. You all have not stood up for the consumer and said ‘no. Enough’s enough.’”

Many at the meeting disagreed with the way the rate increase is structured. Rather than raise the charges that customers pay for electricity and gas, LG&E is proposing increases to the fixed monthly rates that are constant across customers, regardless of how much energy they use.

Cathy Hinko of the Metropolitan Housing Coalition told the commissioners that that change went against every policy the state has enacted to encourage energy savings. If anything, Hinko argued, the rates that should rise are the per unit costs of electricity or gas, so residents can lower their bills by conserving energy.

“The last 25 years of scholarship on both behavioral sciences and environmental sciences are completely ignored by switching to fixed costs instead of the costs we can control and do something about,” she said.

Along that vein, others worried that raising the monthly cost would affect the return on investment for both energy efficiency upgrades and home renewable energy systems, like solar panels. People who have invested in these technologies—or are thinking about investing in these technologies—are counting on lower LG&E bills to pay for the solar panels. An increase to the base monthly rate will make it take longer for them to recoup their investment.

Louisville Gas & Electric representatives didn’t present at the public meeting—they’ll have their turn at a hearing on April 21. In a fact sheet passed out prior to the meeting, the company argued that the rate increase should affect everyone, regardless of how much energy they use, because every ratepayer uses certain services.

“These costs include, but are not limited to, maintaining the meter (meter rental, meter reading and processing), billing, and payment processing,” the handout said. “Even with these adjustments, the basic service charge will be less than the cost to serve customers.”

Now, according to Kentucky law, it’s up to the Public Service Commissioners to decide whether the proposed rate increase is “fair, just and reasonable.” The PSC will also accept written comments on the proposal.

Erica Peterson is WFPL's Director of News and Programming.