Wednesday December 7, 2022
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Beshear Recommends $142 Million Decrease In LG&E, KU Rate Proposal

Attorney General Andy Beshear announced that his Office of Rate Intervention is recommending that the Public Service Commission (PSC) hold LG&E and KU to approximately one-third of the increase requested in recently filed rate cases.

The utility companies are asking the PSC for a $210 million increase in annual revenues.

Beshear’s rate proposal incorporates the testimony of five experts, including an engineer, and asks the PSC to reduce the rate request by $142 million.

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.

“My office clearly understands the need for utility companies to maintain their infrastructure to better serve ratepayers,” Beshear said. “In this instance, we view the requested increase by the utility companies to be excessive and are asking the PSC to take the appropriate action so that any cost passed to consumers isn’t crippling.”

Beshear’s office is also recommending that the fixed customer charge remain the same with no additional increase and eliminate the fixed charge “gas line tracker rider.” The charge as originally proposed was for a one-time, short-term recovery for a specific project. Now the companies want to use the tracker for long-term projects to enable them to collect construction expenses from ratepayers between rate cases.

Beshear is also recommending the PSC reject the proposed smart meter deployment, which will cost customers more than $350 million over the life of the meters.

“After careful review of the filings in this case, we find little support that smart meter deployment will benefit the ratepayers in any way,” Beshear said.

Other recommendations by Beshear’s office include:

  • Delaying a smart grid project.
  • Requesting the PSC reduce proposed transmission spending in an attempt to keep costs for customers down.
  • Recommending a much lower authorized return for shareholders than proposed by the company.

A public hearing on the matter is scheduled for May 2 at the PSC in Frankfort.

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