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AG Recommends $142 Million Cut In LG&E Rate Proposal

Pratt, Liz

Kentucky Attorney General Andy Beshear isrecommending the state Public Service Commission grant only part of a rate increase requested by Louisville Gas & Electric and Kentucky Utilities.

The utilities are requesting a $210 million increase in annual revenues. For LG&E customers, this will show up in an increase in the basic service charge. Right now, that charge is $24.25 for customers that use both electric and gas.

If the PSC approves the rate increase as-is, that charge would raise to $46 a month.

Attorney General Beshear is intervening in the case, along with other parties including Louisville Metro government, the Louisville Metropolitan Housing Authority and Kroger. On Thursday, Beshear’s Office of Rate Intervention recommended the PSC grant only about a third of the proposed rate increase: $68 million.

LG&E and KU argue the rate increase is necessary. In an email, spokeswoman Natasha Collins said the company respects Beshear’s right to provide the PSC with his recommendation.

“We believe the investments we are making are necessary in order to maintain our electric and natural gas systems and continue providing the safe, reliable service our customers have come to depend on,” she wrote. “The investments will allow us to enhance system reliability, restore power to our customers more quickly, and provide them with information that will enable them to make more informed decisions regarding their energy use; while the proposed changes to the basic service charge will help reduce bill volatility and assist customers in better managing their energy bills.”

Part of those investments includes deploying smart meters to all ratepayers. These meters will track energy usage for customers, and will also send information about outages back to the company. Beshear’s recommendation includes rejecting the widespread use of those smart meters.

“My office clearly understands the need for utility companies to maintain their infrastructure to better serve ratepayers,” Beshear said in a press release. “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 is also recommending the basic service charge remain the same. The proposal to raise that charge — rather than increasing the charge based on usage — has been criticized by some who say it discourages energy efficiencyand will disproportionately affect low-income consumers.

The LG&E and KU rate case is scheduled for a public hearing at the Public Service Commission on May 2.

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