Protect KU and LG&E ratepayers | Kentuckians For The Commonwealth

Protect KU and LG&E ratepayers


My name is Austin Norrid. I’m originally from Hopkinsville in western Kentucky. After graduating from the University of Kentucky I moved to Louisville, where I teach music.

During the summer, we have an air quality alert in our city almost every day. It’s rough to see how many of my students have trouble breathing. I want them, and all of us, to live in clean and healthy communities. To do that, we need to invest in affordable, clean energy solutions and reduce our dependence on coal-burned electricity.

Unfortunately, Louisville Gas and Electric and its sister company, Kentucky Utilities, are now proposing harmful new rate structures that will make our communities dirtier and less livable. Specifically, they propose to double the flat monthly service charge we pay, no matter how much energy we use. These plans would hurt low-income residents. And they would limit all customers’ ability to benefit from energy conservation and investments in renewable energy. That’s the wrong direction for Kentucky!

Please call your elected city leaders and ask them to oppose these rate changes. See the box to the right for more information.

If you have time to read, here’s a bit more information about what is being proposed

If you look closely at your electric or gas bill, you’ll notice different types of charges. There’s a flat monthly fee (sometimes called a basic service charge) that we pay no matter how much energy we use. And then there’s a separate rate we pay for the electricity or natural gas we consume. LG&E and KU are proposing to significantly increase the flat monthly service fee, while slightly lowering the rate they charge for energy used.

For customers in Louisville, for example, the monthly charge for electric service will jump from $10.75 to $22, and the monthly charge for natural gas service will climb from $13.50 to $24.00. That means most LG&E’s customers would owe a minimum of $46 a month, even if they use no gas or electricity whatsoever. For customers served by Kentucky Utilities, the base rate for electric service would also climb from $10.75 to $22 per month.

If that scheme sounds familiar, it’s because KFTC and many other groups have opposed it before. But the idea keeps coming back, like a bad reoccurring dream. These rate structures make it very hard for low and moderate-income customers to manage their bills by reducing their home energy use. And their plan makes it less likely that many customers will choose to invest in energy efficiency or renewable energy, since they will be stuck paying higher monthly bills even if their energy use decreases.

LG&E and KU say they need to raise additional revenue at this time in order to upgrade all electric and natural gas meters on their systems to advanced digital meters. They say this investment is necessary to provide customers with more information about their energy use and to reduce the number of employees and service time (since advanced meters can be read and turned on and off remotely).

These two Kentucky-based utilities are subsidiaries of PPL Corporation (formerly Pennsylvania Power and Light), headquartered in Allentown, Pennsylvania. In its 2015 annual report, PPL boasted that its shareholder return of more than 6% was “second to none” among large utilities. The company also increased its dividend to shareholders for the 13th time in the past 14 years.  

LG&E and KU operate as regulated monopolies. This means they alone can legally provide electric (and in some cases natural gas) services within their defined service territories. In return for that monopoly status, regulated utilities in Kentucky must get approval from the Kentucky Public Service Commission (KPSC) for the investments they make and the rates they charge.

KFTC believes the Public Service Commission should closely examine whether or not those new expenses are justified and necessary. But even setting that question aside, we strongly oppose the specific proposals to shift more of each customer’s bill to the flat service fee. Instead, we believe it is in the public interest to establish fair rate structures that support greater use of energy efficiency, energy conservation, and renewable energy in our communities.

LG&E and KU have submitted their proposed new rate structures to the Kentucky Public Service Commission, which will consider testimony and have the final say. There are many ways Kentuckians can make our voices heard on this issue, including:

  • Call your mayor and city council members TODAY, and ask them to protect the public interest and oppose these proposals. (See the phone numbers and links above.)
  • Email Kentucky Attorney General, Andy Beshear, and ask him to protect the public interest and oppose these proposals.
  • Be ready to contact the Kentucky Pubic Service Commission, and ask them to protect the public interest by rejecting these proposals. (A public comment period – including public hearings – will be announced soon. We will share additional information when it is known.)

More information about these proposals can be found on the Kentucky Public Service Commission’s website. LG&E’s proposal is Case No 2016-00371 and KU’s proposal is Case No 2016-00370.