FRANKFORT — Attorney General Andy Beshear announced that his Office of Rate Intervention has entered into a settlement with LG&E and KU that will save Kentucky ratepayers $90 million annually – $33.2 million of that for residential customers.
Late last year, the utility companies proposed to the Public Service Commission a nearly $210 million increase in annual revenues. After studying the rate proposal, Beshear proposed the PSC dramatically reduce the rate request.
Last week, Beshear’s office began working with the utilities on an agreement to lessen the annual revenue increase. The parties signed a settlement April 19 to limit the companies’ proposed increase and to provide certain other concessions.
“My office clearly understands the need for utility companies to maintain their infrastructure to better serve ratepayers, but the settlement reached with my office will lessen the impact to Kentuckians by not passing on excessive costs in ways that would be crippling to hundreds of thousands of ratepayers,” Beshear said.
Beshear said his office was able to work with the utilities to hold the increase in the electric residential customer charge to 75 cents this year and 75 cents in 2018, for a total long-term increase of only $1.50 a month. The utilities originally asked to more than double the customer charge to $22, which would have been an $11.25 monthly increase.
Other aspects of the settlement filed today with the PSC include:
· A more than 50 percent decrease to the residential gas rate increase requested by LG&E.
· The withdrawal of a smart meter project, which would cost customers more than $350 million over the life of the meters. The utilities agreed to create a collaborative to work with interested parties to understand and help address their concerns. Beshear’s office is included in the collaborative.
· An agreement by the utilities to provide shareholder contributions totaling nearly $1.5 million a year to help low-income residential customers defer utility costs.
· The creation of a limited rate pilot for schools in both utilities’ territories to help determine whether they use electricity in such a way to necessitate their own rate schedule.
Beshear’s Office of Rate Intervention serves as a watchdog for consumers in matters relating to health insurance, natural gas, water, sewer, electric and telephone rates. Under Kentucky law, the office is responsible for representing the interests of Kentucky consumers before governmental ratemaking agencies, concentrating on utility cases before PSC.
The PSC will review the reasonableness of the settlement at its May 9 hearing in Frankfort.
LGE and KU provide nearly 950,000 ratepayers electricity, and LG&E provides natural gas to 325,000 ratepayers.