Last year, Kentucky Utilities (alongside its sister company Louisville Gas & Electric) filed a request for another rate increase with the Public Service Commission. Mountain Association and a coalition of partners formally intervened in the case to advocate for our clients and all the small businesses, nonprofits, local governments, and homeowners impacted by increases.
The PSC recently issued their ruling on the case. While we are still processing all the details within the ruling, the initial overview of impacts are summarized below.
Impact to Our Service Area
As part of our support to clients that would be impacted by this rate case, we looked at 218 accounts, 66 of which are small businesses, 85 are nonprofits, and 67 are local governments, to notify them of potential impacts. If approved as proposed, this increase would have raised their electric bills by nearly $306,000 per year – not including increases in taxes and surcharges. As enacted, the increase to our clients will be $207,100.
Though the approved increase was lower than requested by the company, it will still hurt. Additionally, there are significant changes to the Power Service rate for large commercial customers, which now has a complicated three-tier time-of-use rate.
“Many Power Service ratepayers are places like schools and grocery stores; they don’t have energy engineers on their payroll,” said Carrie Ray, Director of Energy Programs with the Mountain Association. “The Companies must provide individual support to these customers to ensure they understand what this new rate structure means and how to manage their usage to keep their bills from spiking as a result.”
If you are concerned about the impacts of this increase on your business or organization, the Mountain Association can provide a free billing review or consultation within our service area, please fill out our short application.
Read on about more impacts in this summarized press release from our coalition of partners…
PSC Rejects Significant Portions of LG&E-KU Requests; Joint Intervenors Cite Wins for Ratepayers and Solar Customers
The Joint Intervenors, (Mountain Association, Metropolitan Housing Coalition, Kentucky Solar Energy Society, and Kentuckians For The Commonwealth), thank the Public Service Commission for their continued dedication to reasoned decision-making.
While more time is needed to analyze the full implications of the decision, Joint Intervenors applaud the Commission for setting rates much lower than those applied for by Louisville Gas & Electric and Kentucky Utilities (LG&E-KU) immediately, and requiring a refund of the excess collection. Since January 1, LG&E-KU have been implementing rates at levels they applied for, even though they themselves have acknowledged several times that those rates are higher than they actually need to recover to make a significant profit.
“With the rate increases during the coldest months of the year LG&E-KU seem to forget that the reason they are granted a monopoly is so that they can provide a reliable public service that is accessible to all customers, regardless of income,” said KFTC member Catherine Clement. “LG&E-KU customers are completely without choice: we cannot safely choose to go without electricity; we cannot choose who provides our service; we cannot choose a cheaper provider. We are glad the PSC is more properly weighing the public interest over the interests of shareholders.”
Solar Impacts
In addition to setting more reasonable rate increases for LG&E-KU, the Commission has also re-instated compensation for rooftop solar from the much lower level implemented by the Company over the past month and a half. The Joint Intervenors will remain vigilant to ensure that rooftop solar customers will be properly compensated for the energy they produced for the system during the previous 45 days.
“The Joint Intervenor’s analysis showed that customer-owned solar generation is worth at least $0.11/kWh,” said Andy McDonald, Board Chair of the Kentucky Solar Energy Society, “significantly more than what LG&E-KU had proposed in this case, $0.038/kWh.
We appreciate that the Commission rejected the Companies’ weak arguments and re-affirmed their understanding of the many ways rooftop solar benefits the grid and all ratepayers, as we demonstrated in our testimony in this case. We are also pleased to see the Commission recognized the value that larger customer-owned solar projects (known as Qualifying Facilities) provide to the utility by approving significantly higher compensation rates for QF customers.”
Large Commercial Customers
Specific aspects of the request will take time to evaluate. For instance, the Intervenors remain concerned by the significant changes to the Power Service rate for large commercial customers, which now has a complicated three-tier time-of-use rate.
“Many Power Service ratepayers are places like schools and grocery stores; they don’t have energy engineers on their payroll,” said Carrie Ray, Director of Energy Programs with the Mountain Association. “The Companies must provide individual support to these customers to ensure they understand what this new rate structure means and how to manage their usage to keep their bills from spiking as a result.”
Other Impacts
”Some of the more nuanced and complicated portions of the Orders, such as those dealing with the Companies’ new tariff for data centers, and settlement request for immediate returns on new power plants under construction, will take time to digest,” said Kentucky Resources Council attorney Byron Gary, who represents the Joint Intervenors along with Earthjustice.
“It is clear that the Commission grappled with these issues much as we did, though. We will also be looking closely over the next few days at how the Commission handled the Due Process issues created for our clients by the Companies’ last-minute filing regarding sped up cost recovery for new gas and old coal.”
