LOUISVILLE, Ky. — Electric companies LG&E and KU agree to raise customers' rates for power and gas by less than originally requested.
What You Need To Know
- LG&E has requested to raise its rates for power by 11.8%
- Customers have spoken out against the hike in public comment meetings
- A settlement reached will allow LG&E to inrease rates 6.4% and KU to increase rates 7.2% both over a period of two years
- The settlement requires approval by the Public Service Commission
Attorney General Daniel Cameron's office made the announcement Monday afternoon, as did Lexington Mayor Linda Gorton's office. The two were part of a group of interveners fighting LG&E's request for an 11.8% increase on customers for power, and a 10.4% increase for power for KU customers.
Cameron's office says the settlement will save Kentuckians $113 million, by instead phasing in a price hike: LG&E rates by 6.4% over two years, and 7.2% for KU customers over two years.
Cameron said in a statement, "As the watchdog for Kentucky ratepayers, we pursued a settlement with LG&E and KU that saves Kentuckians more than $113 million in proposed utility rate increases and ensures the companies will not impose an additional rate increase before July 1, 2025.”
Mayor Gorton also wrote, "our overall goal has been to keep the cost of living low in Lexington. That is especially important right now as we work our way out of a pandemic.”
The agreement still requires final review and approval by the Public Service Commission.
Those whose homes and businesses powered by LG&E and KU were facing having to pay more for electricity and gas. Originally, LG&E has filed a request with the Kentucky Public Service Commission (PSC) energy regulator to raise rates for power by 11.8%, and gas by 9.4%. In ongoing public comment sessions, people voiced opposition to the hike. Most comments centered on the timing, questioning why the raise amid a pandemic.
Mark McKinley is a handyman whose fixes come for free as part of Project Warm. He replaces things like broken locks, busted windows and leaking doors and roofs. It's all in service to citizens paying higher-than-necessary electric bills. His fixes ensure no heat or air condition is wasted and residents pay the lowest price for power possible.
"I’ve been in a home where a man and his wife, they both have cancer," McKinley gave an example. "And they apologize for the condition of their home, but they just don’t have money because it’s going to their treatments.”
That's why he says a hike in energy rates could ruin the people he helps.
"LG&E is a long-time big-time supporter of Project Warm. But I tell you, the customers that I see every day, they don’t have a lot of wiggle room in their budget," McKinley said.
For power alone, an 11.8% increase on a $116.65 bill, for example, equates to about $13.76 extra per bill.
An LG&E spokesperson said it's costing more to keep the lights on, so the raise is necessary.
"We need to be able to keep the lights on, keep the gas flowing," said LG&E spokeswoman Natasha Collins. "Doing things like putting in new wires, replacing old wooden poles with steel poles, putting in new circuit breakers, substation equipment," she listed the purchases she claims are necessary.
People are speaking out against the hike in PSC public input sessions. Two meetings were held last week, and another is set for Tuesday night.
"Our monthly bill would go up by about $15," Mark Reilly told Spectrum News 1. He's one who virtually urged regulators not to approve raising rates.
"You know, baby boomers in this area, a lot of us like I am, are retired," Reilly explained. "So our incomes are fixed.”
"Both, like, the size and the timing are just inappropriate," he argued. "When you see your monthly bill, you think ‘oh my gosh, it’s bad enough already, and it could go up.’"
Reilly questions why push prices higher during a pandemic when some people have lost jobs. To that, Collins says her company has already delayed the raise request.
"We actually allowed a couple of months, pushed it back a couple of months in order for more economic development to occur," Collins said. "However, we did reach a point where we had to move forward."
McKinley compares increasing bills and the chance of paying more for power to a leaking roof.
“Buckets around the house - and I see this - the next storm comes through, and the whole ceiling drops," he said.
McKinley said budgets already hang in balance for many neighbors.
If the settled upon percentages are approved by the PSC, the increases will be phased in over two years. Customers would not see the full amount all at once. That would start no earlier than this summer.