LG&E wants to increase rates; several groups push back

Louisville Gas and Electric could soon raise electric and gas rates for customers.
Published: Dec. 29, 2020 at 8:40 AM EST
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LOUISVILLE, Ky. (WAVE) - Louisville Gas and Electric could soon raise electric and gas rates for customers.

LG&E asked the Kentucky Public Service Commission to raise electric rates 11.81 percent, or an additional $11.74 per month for the average customer, and gas rates 9.37 percent, or an additional $6.17.

The increase would generate an extra $161.1 million for LG&E, which hopes to use the revenue on infrastructure improvements.

“We’ve been doing things like putting in new wires, replacing old wooden poles with new steel poles, putting in new equipment in our substations, putting in new circuit breakers, and also investing in that automated equipment that helps to pinpoint the precise location of an outage, isolate that outage, and restore service to other customers,” LG&E spokeswoman Natasha Collins said.

Collins told WAVE 3 News that LG&E already has reduced power outage times by 20 percent over the past decade, and the additional investments funded by the rate increase would allow the company to continue to enhance its service.

However, consumer advocates like Tom Fitzgerald, director of the Kentucky Resources Council, said the proposed increase is coming at a time when many are struggling because of the economic impacts of COVID-19.

“These are hard times,” Fitzgerald said, “and I think the burden is particularly high or should be high on utility companies to justify rate increases during a pandemic and during an economic downturn.”

Collins said LG&E took the pandemic into consideration and delayed making its request by a few months. In addition, the company proposed an economic relief surcredit program, which would cut the rate increase down by a few dollars for the first 12 months if approved.

Under the program, the average electric bill increase would be $8.67 instead of $11.74, and the average gas bill would increase by $5.83 versus $6.17.

It’s possible the proposed increase also could impact more than people’s electric and gas bills though.

Both Kroger and Walmart filed motions to intervene in the case which said they may have to raise food and merchandise prices to cover the costs of the rate increase. In addition, the cities of Louisville and Lexington filed a joint motion to intervene in the case and claimed the rate hike couldn’t come at a worse time.

The Kentucky Public Service Commission is responsible for either approving or denying LG&E’s request to increase rates. Fitzgerald said the public has the opportunity to voice their opinion on the proposal through public hearings which have not been scheduled yet.

“The people ought to be heard on what they think is fair, what they think is just and what they think is reasonable, because you can’t determine those things without looking at the times that people find themselves in,” Fitzgerald said. “Everybody has had to tighten their belts and the shareholders of PPL should be required to do the same.”

The public can also send KPSC their thoughts about the proposed rate increase by clicking here. The case number is Case # 2020-00350.

Several companies, groups and entities have filed motions to intervene in the case.

A court date has not been set yet.

In addition, Kentucky Utilities Company also requested a rate increase which would generate an additional $170.5 million. According to the motion filed, KU claimed its existing rates generate $170.5 million less than what is necessary to meet the company’s “reasonable operating expenses and provide a reasonable rate of return.”

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