A few months ago, Kentucky Utilities (alongside its sister company Louisville Gas & Electric) filed a request for another rate increase with the Public Service Commission. If this seems like déjà vu, it’s because it’s their fourth formal rate increase in the past 10 years. This new increase, if passed, will mean that residential and small commercial rates will have gone up about 40% compared to where they were in 2015. Meter fees will have gone up 81% for residential customers and 86% for small commercial customers.
Impacts on Kentucky Businesses & Organizations
Credit: Enel
When a rate increase is proposed, the Mountain Association Energy Team calculates the impacts on our clients. We want to make sure the nonprofits, small businesses, and local governments we work with are aware of what’s being proposed and how it’s going to affect their budgets. We looked at 218 accounts, 66 of which are small businesses, 85 are nonprofits, and 67 are local governments. If passed as proposed, this increase will raise electric bills for these clients by nearly $306,000 per year – not including increases in taxes and surcharges. One local government alone is looking at over $13,000 per year in additional electric costs. That’s money that won’t go toward hiring new employees, supporting vital services, or investing in communities.
For large commercial customers – places like grocery stores, small manufacturing facilities, medical clinics, and schools – things will get even more complicated. These customers pay a demand charge, an additional cost based on how much power they pull through their meter at one time. Right now, these customers pay for the most power they pull through their meter at one time over the course of the month. Now KU is proposing to completely restructure that rate into three separate charges based on the time of day the highest power draw happens.
I’ve been analyzing commercial electric bills for 8 years, and it took me several hours to figure out how to utilize the information from our clients’ advanced meters to understand what the impacts of the new rates would be. And that’s only the first step – customers will then need to know how to shift their operations to different times of day to reduce their costs. If you’re the owner of a grocery store, or running a school, you’re probably not going to have the time or expertise to figure that out, if it’s even possible to shift usage in the first place.
KU wants to impose a complex rate structure on an entire class of customers without, apparently, offering any assistance or resources to help them manage their increased costs. You should not need an advanced degree to understand how to manage your electric bill.
Impacts on Solar Customers
On top of all this, KU is again trying to change its solar net metering rate by slashing the amount customers would be credited for electricity they generate but don’t use immediately by nearly half. This time, however, they want it to affect existing solar customers. This means that homeowners and businesses who have installed solar since 2021 with the expectation that they would get a certain financial return could see that investment downgraded. One of our clients would see their yearly solar savings drop by nearly $1,600 per year under the proposed rate. This is especially egregious because ratepayers have looked to solar as a way to curb the impact of repeated rate increases, and now KU is trying to claw back some of those savings.
What You Can Do
Mountain Association is jointly intervening in the rate case with other public interest organizations to advocate for our clients and all the small businesses, nonprofits, local governments, and homeowners who will be impacted by this increase. It’s vitally important that the Public Service Commission also hears directly from the people that will be affected.
If you’re a KU customer, you can file a comment on this rate increase with the PSC at https://www.k4ed.org/lge-ku.html, or directly by emailing psc.comment@ky.gov, and mentioning Case No. 2025-00113. You can also attend a public meeting:
- Lexington: October 14 at 5 p.m., Bluegrass Community & Technical College: Keeneland Room, 500 Newtown Pike
- Middlesboro: October 16 at 5 p.m., Middlesboro Community Center, 705 N. Petersborough Ave
- Frankfort: November 3 at 9 a.m., PSC Offices, 211 Sower Blvd
If you’re worried about your electric bills, energy upgrades can help you reduce the impact of rate increases. KU offers rebates for commercial energy upgrades, and some commercial customers may be eligible for free lighting and thermostat upgrades. Our Energy Team can help you understand your options. Learn more and get started at mtassociation.org/energy.
