Kentucky Utilities Co., which provides electricity to portions of suburban Henderson and several communities in the county, is asking state regulators to permit it to increase residential power rates by an average of nearly 10.7%.
Similar increases are proposed for KU’s commercial and industrial customers.
If approved, KU residential customers using an average of 1,120 kilowatt-hours (kWh) per month would see an increase of $12.09 in their total monthly electric bill for the first 12 months after the ruling, starting sometime in mid-2021.
KU also is proposing that residential rates increase an additional 76 cents per month — to a total of $12.85 — for that same power usage, effective in mid-2022. The Lexington-based power company described that proposed delay in implementing the full rate increase as an “economic relief surcredit” that would “help to mitigate the impact of the rate adjustment” for one year.
“Additionally, pending the outcome of this proceeding, it’s our goal not to request another base rate adjustment for several years,” Paul Thompson, president and CEO of KU and sister company Louisville Gas & Electric Co., said in the news release.
KU last received a rate increase of $4.27 for a typical residential customer effective in June 2019; before that, rates last increased in 2017.
KU cited rising costs, including for cybersecurity, outside labor and upgrades to its electric system, as the reason for seeking the latest rate increase. It said physical improvements such as upgrading lines, replacing aging wooden poles with steel and other improvements have reduced power outage frequency and duration by 20% over the past decade.
KU submitted its application for the rate increase to the Kentucky Public Service Commission on Wednesday.
Comments on the rate change can be submitted in writing to the Public Service Commission, P.O. Box 615, Frankfort, KY 40602 or by email to email@example.com. All comments should reference Case No. 2020-00349.
The Kentucky Attorney General’s Office has intervened in the case to represent the interests of KU consumers, as is standard procedure. Kentucky Utility Industrial Customers, which represents large industrial power customers, has also intervened.
Current and future filings by KU and other parties in Case No. 2020-00349 can be found at the PSC website at psc.ky.gov.
KU serves 558,000 customers in 77 Kentucky counties and five counties in Virginia. That includes 10,976 customers in the Tri-county — homes, businesses, factories and other entities — including 2,816 in Henderson County, 5,493 in Union County and 2,667 in Webster County.
In addition to the KU residential rate increase, LG&E is seeking to raise residential rates by $8.67 for a typical customer using 894 kWh during the first 12 months, then increase by an additional $3.07 starting in mid-2022.
“We have worked to mitigate the financial impacts until the economy has a chance to rebound, and we are offering our customers programs to help them manage their bills during this most difficult time,” Thompson said. “I encourage customers having difficulty paying their utility bills to reach out to us to utilize our flexible payment options and be connected to other agencies that can provide support.”
In other matters, KU and LG&E said they are seeking approval for advanced metering infrastructure, faster electric vehicle charging stations and an updated net metering tariff.
They are asking for permission for a “full deployment” of advanced electric meters, also known as smart meters, without asking for an increase in rates related to the installation.
Already, as part of a pilot program, 20,000 advanced meters have been installed at the request of customers, and more than 5,000 customers are on a waiting list. The companies said advanced meters help customers better understand and manage their energy use and provide LG&E and KU information that helps reduce outages.
KU proposes that all customers would be placed on smart meters, although a customer could opt out by paying a one-time fee of $39 and a $15 monthly fee, according to spokeswoman Natasha Collins.
The PSC in 2018 rejected a proposal by the companies that would have required their 1.3 million customers to use smart meters or else pay a monthly opt-out penalty.
Meanwhile, throughout Kentucky the two utilities already offer 20 public electric vehicle charging stations that charge a vehicle at 12 miles to 60 miles of range per hour. To help alleviate “range anxiety,” LG&E and KU propose adding up to eight additional fast-charging stations that can provide customers with 300 miles of range per hour of charging. “While just a first step, it is a key step for infrastructure development for EV deployment in Kentucky,” they said.
LG&E and KU also are asking to reduce what they must pay for excess energy created by customers with private generation systems, such as solar or wind power systems. Details weren’t immediately available.
The adjustment would have no impact on current net metering customers for 25 years and will not impact new net metering customers who simply want to generate and offset their energy use with a private generation system. Only new net metering customers who wish to sell excess energy back to LG&E and KU would be impacted by the change.
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