Why are LG&E and KU requesting rate increases?

In the 29 months before LG&E and KU filed their request in June, the companies invested more than $1 billion to meet customers' energy demands and improve service and reliability. More than 4,000 generation, transmission and electric and gas distribution projects occurred during that time. Some of the largest investments were to meet customers' continued — and growing — energy needs and to enhance reliability, including:

• Trimble County 2 Generating Station – a new 760-megawatt unit that is one of the cleanest coal-fired units in the country.



• LG&E also made considerable investments in its natural gas business as part of its 615-mile natural gas main replacement project and increased leak surveying. And LG&E is upgrading the Ohio Falls hydroelectric generating station on the Ohio River.



• KU made significant investments in substation reliability and upgrades to its distribution and transmission system.



• The utilities have taken significant steps to improve customer service by creating more than 150 new jobs in just the last year. The bulk of the positions are located in Morganfield, Kentucky, at the new LG&E and KU customer contact center, where more than 70 employees have been hired.



• Other positions have been filled to help LG&E and KU meet tighter federal cyber security standards as well as more stringent transmission reliability requirements.

What is the amount the PSC approved for each company?

The Kentucky Public Service Commission approved an increase of $33.7 million for LG&E's electric customers; LG&E had requested an increase of $62.1 million. The PSC approved an increase of $15 million for LG&E's natural gas customers compared to the company's request of $17.2 million. And the PSC approved an increase of $51 million for KU compared to the company's request of $82.4 million.



How will the increase affect my bill?

For LG&E residential electric customers using the typical average of 1,000 kilowatt hours (kWh) per month, the increase will mean an additional $4.31 per month.

For LG&E residential natural gas customers, the increase will mean an additional $3.50 per month for customers using the typical average of 6,000 cubic feet (60 Ccf) per month.

For KU customers, the increase will mean an additional 4.82 per month for customers using the typical average of 1,000 kilowatt hours per month.



What can I do to offset the impact of these — and any future — rate increases?

Take steps to use energy more wisely:

• Know where your energy is going. Perform an online home energy analysis.



• Schedule an on-site home energy analysis to receive a more in-depth report from a trained professional.



• Visit www.lge-ku.com/savingenergy for a complete list of all our energy-saving programs and how you can enroll.

As part of the LG&E and KU settlement agreement with interested parties, the companies will offer a two-year energy efficiency program to help Kentucky school districts find ways to use energy more wisely.

Enroll in our Budget Payment Plan

• Helps reduce the seasonal ups and downs normally associated with utility bills.



• Spreads costs over a 12-month period, adjusted periodically to reflect actual usage.

How do LG&E's and KU's rates compare to those in the region and in the U.S.?

Even with this increase, LG&E and KU have rates that are below the regional and national averages.



What else is in the PSC's Order?

Customers now have a longer period of time to pay their bills each month. Previously, bills were due 12 days from the date the bill was mailed and a late payment charge was added if payment was not received within three days after the due date. Customers now have at least 22 days to pay their bill from the date the bill is mailed and late payment charges are not applied if payment is not received by the payment due date.

In addition, on Jan. 1, 2013 the late payment charge decreased from 5 percent to 3 percent.

The Basic Service Charge for KU and LG&E electric customers increased from $8.50 per month to $10.75 per month; the Basic Service Charge for LG&E natural gas customers increased from $12.50 per month to $13.50 per month. The Basic Service Charge covers the costs for maintaining the meter (meter, meter reading and processing expenses), as well as billing and payment processing.



What are LG&E and KU doing to help those in need?

As part of the agreement and PSC approval, LG&E and KU will contribute an additional $187,500 in shareholder funds each year to low-income assistance programs bringing the total shareholder commitment to $1 million per year.

In addition, the Home Energy Assistance (HEA) program fee will increase from 16 cents per meter to 25 cents per meter.

The companies certainly recognize the impact of any rate increase, but we are especially concerned about those who struggle to pay their bills. The companies remain committed to various efforts that support people in need, including:

• Energy Management Workshops



• Weatherization Blitzes



• Home Energy Assistance Program



• Community Winterhelp (for LG&E Customers), WinterCare Energy Assistance Fund (for KU Customers)



• United Way agencies throughout our service area



• WHAS Crusade for Children



• Donations and sponsorships through the LG&E and KU Foundation