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LG&E/KU Customers Stuck Paying For Disbanded Trade Group

Pratt, Liz

Louisville Gas & Electric and Kentucky Utilities’ latest rate hike puts ratepayers on the hook to pay $269,000 for a secretive utility industry organization that is going out of business.

Power companies including LG&E charge customers to cover part of their dues for the Utility Air Regulatory Group, which argues against tighter clean air rules. Currently, Congress is investigating UARG over ethical conflicts between the group and a top Trump-appointee in the Environmental Protection Agency.

Last Friday the Utility Air Regulatory Group announced it will wind down and eventually dismantle because of the membership declines, according to a press release.

That won't change customer's bills in Kentucky however. Louisville Gas & Electric & Kentucky Utilities says existing rates will not change.

"Revenue and expenses for providing safe and reliable service are always changing and while some costs may go down, others will certainly go up," said Natasha Collins, LG&E spokeswoman, in an email.

Enough power companies have left UARG in recent months to reduce the group’s budget by 35 percent, said Matt Kasper, consumer advocate and Energy and Policy Institute Research Director.

Kasper said its good news that Kentuckians will no longer have to pay membership dues for the group. He's hopeful the dissolution of UARG will force power companies to become more transparent with customer money.

“Customers should care because when their power companies are taking customer money, they are not acting in the best interest for the customers,” Kasper said. “And it’s not necessary to be a part of and use customer money for these litigation activities. These are purely voluntary groups. They are political.”

Politico reported on internal UARG documents revealing how power companies pay dues for membership earlier this year.

The House Energy and Commerce Committee is now investigating ties between the group and the EPA's Bill Wehrum, the assistant administrator for the Office of Air and Radiation, who represented UARG until 2017.

UARG has been around for decades, but spent millions of dollars during the Obama administration to repeal new rules under the Clean Air Act .

The group challenged carbon and mercury rules for coal plants, updated ozone standards (an ongoing issue in Louisville), and safety rules for chemical facilities, among others, according to Politico.

Even with the dissolution of UARG, other similar groups continue including the Utility Water Act Group, run by the same law firm as UARG, Kasper said.

LG&E/KU customers will still pay another $727,000 toward dues for the Edison Electric Institute, which paid for ads in support of SB 100, a bill solar advocates warn will decrease demand for rooftop solar and give utilities an unfair advantage.

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

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