Home » LG&E/KU request 6.5% rate increase to recover spending for improved service

LG&E/KU request 6.5% rate increase to recover spending for improved service

LOUISVILLE, Ky. — Louisville Gas and Electric Co. announced today it plans to file a request with the Kentucky Public Service Commission later this month to increase base electric rates by $62.1 million primarily to recover costs associated with improving service and reliability. The company is also requesting a $17.2 million base natural gas rate increase.

LG&E and its sister utility, Kentucky Utilities Co., have invested more than $1 billion over the last 29 months to meet energy demands and improve service and reliability. More than 4,000 generation, transmission and electric and gas distribution projects have occurred during that time.

Some of the largest investments were to meet customers’ continued growing energy needs and enhance reliability — the new 585-net-megawatt unit at the Trimble County 2 Generating Station, one of the cleanest coal-fired units in the country, upgrades to the distribution and transmission systems and upgrades at Ohio Falls, the hydroelectric plant on the Ohio River. LG&E also made considerable investments in its natural gas business as part of its continued 615-mile natural gas main replacement project and increased leak surveying.

In addition, LG&E is requesting a Certificate of Public Convenience and Necessity for a proposed five-year natural gas line program, similar to what many other gas utilities around the country have done, to relieve customers from the responsibility of maintaining the part of the gas infrastructure called the “riser” — the pipe from the ground to the meter — and allow LG&E to make necessary repairs on it. As part of the program, LG&E would proactively replace certain gas risers and take ownership of the natural gas line segment that runs from the customer property line to the LG&E gas meter. The costs associated with this program and the continuation of the gas main replacement project would be recovered under a new rate mechanism called a “gas line tracker,” which would appear as a separate line item on LG&E natural gas customers’ bills.

The utilities have taken significant steps to improve service by creating nearly 175 new jobs since the last rate case. Many of the positions are located in Morganfield at LG&E’s and KU’s new customer care center, where approximately 50 employees were hired.

The utilities also have created a number of jobs to help meet tighter federal cyber security standards as well as more stringent transmission reliability requirements. LG&E and KU were honored last year for superior commitment to reliability performance by SERC Reliability Corporation, the nonprofit organization responsible for promoting and improving system reliability.

“We are creating additional jobs, adding cleaner energy and improving our service to ensure that we continue to deliver safe and reliable energy at the lowest cost possible,” said Victor A. Staffieri, chairman, CEO and president of LG&E and KU. “We continue to be ranked as an industry leader in areas such as low rates, safety, reliability and operational excellence, and, just as a vehicle needs regular maintenance, we must continue to invest in our system.”

For a residential LG&E electric customer using 1,000 kWh per month, this will mean an increase of approximately $7.21 per month, or less than 25 cents per day. For a natural gas customer using 60 Ccf per month, the base rate increase will be approximately $3.44 per month, or 11 cents per day. The initial cost associated with the gas line tracker would be approximately $2.35 per month beginning 2013.

LG&E will file for the increase on June 29 and, if approved, the increases will not occur until January 2013. Customers can visit www.lge-ku.com/rates for more information concerning the requested rate adjustments.

To help offset the requested rate increases, customers are encouraged to take action and enroll in the company’s energy efficiency programs designed to help customers save energy and money. Visit www.lge-ku.com/savingenergy for a complete list of energy efficiency programs and services.

Louisville Gas and Electric Co. and Kentucky Utilities Co., part of the PPL Corp. (NYSE: PPL) family of companies, are regulated utilities that serve a total of 1.2 million customers and have consistently ranked among the best companies for customer service in the United States. LG&E serves 321,000 natural gas and 397,000 electric customers in Louisville and 16 surrounding counties. Kentucky Utilities serves 546,000 customers in 77 Kentucky counties and five counties in Virginia. More information is available at www.lge-ku.com and www.pplweb.com.