LG&E, KU Reach Settlement with Parties in Rate Case
LOUISVILLE, Ky. — Louisville Gas and Electric Company, Kentucky Utilities Company, the Kentucky Attorney General's Office, the Kentucky Industrial Utilities Customers, Lexington-Fayette Urban County Government, The Kroger Company and the low-income advocates have reached a settlement agreement in the LG&E and KU rate cases. The settlement will be formally presented at the hearing this morning at the Kentucky Public Service Commission in Frankfort.
The settlement means that electric customers of LG&E and KU will likely enjoy rate reductions beginning Feb. 6. For typical KU residential customers, using 1,000 kWh, the proposed reduction is 60 cents per month and for typical LG&E residential customers the proposed reduction is expected to be $1 per month. A typical LG&E residential gas customer, using 70 ccf, is expected to see an increase of $5.10 per month.
"Settling these cases is the right decision," said Vic Staffieri, Chairman, CEO and President of E.ON U.S., the parent company of LG&E and KU. "As with any negotiation, there is give and take on both sides. In this case, while we continue to believe our original requests were reasonable, the differences between the parties were significant. The settlement allows for a modest reduction in residential electric customers' bills while allowing us to recover some of our costs for improvements to our natural gas system."
As previously noted, as a result of the companies' filing for base rates and their subsequent implementation, customers will no longer see the merger surcredit or the value delivery credits on their bill. The value delivery credit ended in August and the merger surcredit will disappear when the new rates go into effect.
"I can reassure customers, however, that this settlement will not affect our reliability or service levels," said Staffieri.
The settlement agreement is still subject to KPSC review and approval.
E.ON U.S., headquartered in Louisville, Ky., is a subsidiary of E.ON A.G., the world's largest investor-owned energy services provider. E.ON U.S. is a diversified energy services company that owns and operates Louisville Gas and Electric Company, a regulated utility that serves 326,000 natural gas and 398,000 electric customers in Louisville and 16 surrounding counties, and Kentucky Utilities Company, a regulated electric utility in Lexington, Ky., that serves 531,000 customers in 77 Kentucky counties and five counties in Virginia.