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LG&E, KU To Request Rate Hike For Improvements

Louisville Gas & Electric customers could see another rate hike under a request the utility plans to file with state regulators later this month.

Typical residential customers could see monthly electricity bills increase about $4.23 on average, said Natasha Collins, LG&E spokeswoman. Average gas rates would rise about $4.93 per month under the proposal, she said.

Kentucky Utilities customers could see electricity rates increase $9.63 per month on average. The higher costs for KU customers reflect the broader service territory, which include 77 counties in Kentucky, Collins said.

The utility generally requests some sort of a rate review every few years. The last request began in 2016, but didn’t go into effect until after regulators allowed the rate increase in June of last year.

LG&E says it will ask the Kentucky Public Service Commission to raise rates for nearly 1.3 million residential gas and electric customers to support system-wide improvements.

“The additional funding that we plan to request from the commission is to support improvements that we’re making throughout our system so that we can continue providing safe, reliable service to our customers,” Collins said.

The utility began making improvements at the start of this year with a plan that invests more than $2.2 billion to increase service reliability. Service interruptions have declined 35 percent in the last seven years, though that doesn’t include interruptions from “extreme storms,” according to the news release.

The decision to raise rates ultimately rests with the Kentucky Public Service Commission. It’s the commission’s job to balance the competing needs of utilities and customers to make certain all rate increases are fair and just.

The process will give the public a chance to weigh-in on the rate hike with meetings and comments.

In August, the commission denied LG&E’s request to deploy advanced “smart” meters to ratepayers. The utility estimated the roll-out would cost $350 million and increase customer’s rates by $2.60 per month.

In that case, the commission found LG&E and KU hadn’t offered sufficient proof that the benefits of deploying the meters would outweigh their substantial cost.

LG&E last asked for a rate increase in 2016. It took until June of last year for the Public Service Commission to make a final decision allowing the utility to raise rates.

That rate hike raised the typical LG&E customer’s electric bill by about $6.51 a month. The bill for a typical LG&E gas customer increased by about $1.33.

Overall, Kentucky’s electricity rates remain among these  lowest in the nation averaging less than 11 cents per kilowatt hour in June.

This story has been updated to fix an incorrect number provided by an LG&E spokeswoman estimating the average increase to a typical residential customer's electric bill. Rate hikes from 2016 were also changed; the LG&E spokeswoman said the Kentucky Public Service Commission did publish the numbers originally used in the story in a press release, but the commission later changed its order without issuing a new release.

Ryan Van Velzer is the Kentucky Public Radio Managing Editor. Email Ryan at rvanvelzer@lpm.org.

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