KU service fee hikes

Louisville Gas & Electric and Kentucky Utilities are proposing unfair new rates that will hurt customers, especially low-income people, and damage our health and air quality.

 

LG&E and KU want to double their flat monthly service charge, the fee that people pay no matter how much energy they use. The base rate for KU’s electric service would climb from $10.75 to $22 per month. The monthly fee for LG&E’s electric service would also jump from $10.75 to $22, and the charge for natural gas service would climb from $13.50 to $24. That means most of LG&E’s residential customers will owe a minimum of $46 a month – even if they use no gas or electricity whatsoever!

 

These proposals will hurt many customers, especially low- and fixed-income people, apartment dwellers and people who attempt to conserve energy. They will limit our ability to save money by reducing our energy use. And they will discourage many people from installing rooftop solar or energy efficient systems, steps which are needed to lower harmful pollution and protect our health and climate. In short, these rates are the wrong direction for our community.

 

The Kentucky Public Service Commission can approve, change or reject LG&E and KU’s proposed new rates. It’s important for LG&E and KU customers to make our voices heard!

 

The most effective public comments are hand-written and personal. Messages can also be submitted by email. All comments should be submitted before mid-April 2017.

 

Send your comments to: Kentucky Public Service Commission, Public Information Officer, P.O. Box 615, Frankfort, Ky. 40602 or edit and submit the form below to email comments the Kentucky PSC.

 

You must include the rate case in the subject of your email and early in your letter, along with your full name and address.

  • For LG&E customers, the rate case is Case #2016-00371.

  • For KU customers, the rate case is Case #2016-00370.
 

Here’s a bit more information about what is being proposed:

 

More information about these proposals can be found on the Kentucky Public Service Commission’s website. LG&E’s proposal is Case #2016-00371 and KU’s proposal is Case #2016-00370.

 

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 on the amount of 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 for energy used.

 

If that scheme sounds familiar, it’s because KFTC and many other groups have opposed it before. But the idea keeps coming back. A 2016 report for the Consumers Union documented similar proposals in 32 states in 2014 and 2015. By shifting more costs to the flat service fee, the utilities hope to insulate themselves from risk. But 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 high monthly bills even if their energy use decreases.

 

The utilities say they need the new charges to upgrade all electric and natural gas meters on their system to advanced digital meters, or Smart Meters. Digital meters can play an important role in encouraging energy conservation by supporting time-of-use pricing. If designed well, time-of-use rates can offer advantages for customers and utilities. But LG&E and KU are not proposing to use the new meters for that purpose. Instead, they say their investment will allow them to reduce personnel costs (by eliminating jobs) and cut service response time, since the meters can be turned on and off remotely. So in effect, they are asking for a permanent rate increase from customers for a one-time cost which will lead to job cuts and permanent savings for the utilities.

 

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. Unfortunately, state lawmakers repeatedly have cut the PSC’s budget in recent years, and Governor Bevin just ordered the elimination of many staff positions, including the Director of Consumer Services.

 

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

 
 

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ex: 123 Main St

Message

Kentucky Public Service Commission
 
Subject: KU service fee hikes - Case #2016-00370
 
Dear [[Recipient's Title and Name]]:
 
 
 
[ Your Full Name ]