Business Power Service bill

Current Usage

Read Code Definitions

Actual Read (R)

An LG&E or KU employee or contractor reads and records the meter readings in person.

Verified Read (V)

An LG&E or KU employee or contractor has re-checked the meter in person and verifies the reading on a hand-held device.

Estimated Read (E)

The reading is performed at LG&E and KU’s office, and is based on historical usage, an average from previous months or the previous year. Any over-estimation or shortfall will be adjusted on the next bill or when an actual or verified read takes place.

Self-Read (S)

In rare cases, customers can report their own meter readings to the company, but LG&E and KU will perform an actual read periodically to verify the information.

Kilowatt (kW)

A kilowatt (kW) is a metric that equals 1,000 Watts of power. Wattage, in turn, indicates how much power a device can provide over a relative amount of time.

Kilowatt Hour (kWh)

A kilowatt-hour (kWh) is a measure of the total energy used over a specific period of time.


Meter Multiplier

The actual voltage/current used is often too large to be registered by your meter. Therefore, a meter’s registering capacity may only represent a small percentage of your actual load. To determine the actual usage on the demand meter, the registered usage must be multiplied by the meter multiplier.


Demand

Demand (kW/kVA) is the rate at which you consume electricity, or the amount needed to power your business at any point.

Current Electric Charges

Note: The example above reflects rates approved by the Kentucky Public Service Commission, effective December 2017 (LG&E). 


Basic Service Charge 

The Basic Service Charge is a fixed minimum charge included in the bill for LG&E and KU to serve our customers. 

How is it calculated? 

This is a flat amount based on your rate type. 

Why is this charge on your bill? 

The Basic Service Charge is a fixed minimum charge included in the bill for LG&E and KU to serve our customers. It is designed to help defray some of the monthly administrative and fixed system costs involved in providing service to each customer, regardless of how much or how little energy they use. These costs include, but are not limited to, maintaining the meter (meter rental, meter reading and processing), billing, payment processing, infrastructure investments and transmission line maintenance. 


Energy Charge 

Energy (kWh) is the quantity (usage) of electricity used. 

How is it calculated? 

Energy Charge rate (x) usage kWh 

Why is this charge on your bill? 

The Power Service Energy Charge recovers the variable operating costs incurred to provide the amount of electricity (kWh) consumed during the billing period. 

BASE DEMAND CHARGE 

The load will be measured and will be the average kW delivered to the customer during the 15-minute period of maximum use during the month. The time periods for the measurement of demand charges are all in Eastern Standard Time (EST) and Daylight Savings Time is not observed. 

How is it calculated? 

Base Demand rate (x) current monthly measured kW 


Electric DSM 

Electric Demand Side Management (DSM) – LG&E and KU’s energy efficiency portfolio of programs that helps residential and business customers reduce energy load. 

What is included? 

The DSM includes all expected costs that have been approved by the Kentucky Public Service Commission for each 12-month period for demand-side management programs. Such program costs include the cost of planning, developing, implementing, operating, monitoring, and evaluating DSM programs. 

How is it calculated? 

Monthly adjustment factor (x) monthly kWh. 

Why is this charge on your bill? 

Electric Demand Side Management (DSM) charges are added to the customer’s bill to cover energy conservation programs, including Demand Conservation and weatherization efforts. 


Environmental Surcharge 

The Environmental Cost Recovery (ECR) Surcharge allows for the recovery of costs associated with required, and Kentucky Public Service Commission-approved, environmental projects to meet legislatively imposed regulations, including air emission, land and water quality controls. The ECR is a monthly adjustment. 

What is included? 

A percent of Basic Service Charge, Energy Charge, and Demand Charge (Base Fuel Charge is subtracted). 

How is it calculated? 

Monthly adjustment factor (x) non-fuel portion of the bill 

Why is this charge on your bill? 

Kentucky regulations allow for full cost recovery of qualified environmental projects for coal-fired generation. The recovery is limited to projects that are included in each company’s compliance plan(s) that have been filed and approved by the KPSC. The companies are also permitted to earn a reasonable return on construction and capital expenditures, and operating expenses associated with the approved projects. The ECR is a monthly adjustment. 


Electric Fuel Adjustment

The electric Fuel Adjustment Clause (FAC) line item allows for the pass-through of the actual fuel cost to provide service to customers. This is a monthly adjustment. 

How is it calculated? 

Monthly adjustment factor (x) monthly kWh 

Why is this charge on your bill? 

Fluctuating prices for natural gas and coal have a significant impact on this line item on a customer’s bill. The FAC is adjusted monthly and is dependent on various factors, such as fuel and coal prices that affect LG&E and KU’s cost of generating electricity to meet our customers’ needs. This can be a positive impact on a customer’s bill, resulting in a credit. 


Taxes & Fees 

Includes applicable state and/or local taxes. 

What is included? 

• Kentucky state sales tax 

• School tax (if applicable) 

• Franchise fee (if applicable) 

How is it calculated? 

Tax percentage (x) sub total. 

Minimum Billing Demand Information

Note: The example above reflects rates approved by the Kentucky Public Service Commission, effective July 2017 (LG&E). 


Minimum Billing Demand Information

Power Service Rates 

Power Service rates reflect the seasonal differences in cost to generate and supply power to customers. Minimum charges may occur on bills based upon the variability of current versus historical load (demand). 

Why are minimum billing charges on my bill? 

When an energy company installs electrical service for a commercial customer, there is often a substantial investment. All power lines, transformers and measuring equipment must be sized according to the expected demand. In order to recover this investment over a certain period of time, the contract capacity specifies the minimum demand (kW) which may be used in billing charges. 


Power Service Demand Charges

Your monthly bill will always include the Basic Service Charge and a demand charge even if energy use for the month was zero. There may be months that there is a minimum demand charge if current load (demand) is substantially less than historical load (demand). 

How is it calculated? 

On a customer’s bill, the Power Service Demand Charge is calculated as the Base Demand rate (x) the greater of the following, as measured in kW: 

• The maximum measured Demand reading in the current billing period 

• 50% of the highest measured demand reading from the prior 11 months 

• 60% of the contract capacity 

or 

• A minimum of 50 kW 


Contract Capacity

The anticipated customer load (demand) is utilized to establish the contract capacity between customer and the company. This ensures that the company is providing the customer the facilities to serve the customer’s needs. The contract capacity is a minimum one year agreement that is signed by both the customer and the company. The contract capacity is determined based on one of the following: 

• The highest demand reading from the prior 12 months if usage existed 

• Information obtained from the customer provided Load Data Sheet 

or 

• A mutually agreed upon maximum expected load (demand) on the system that is specified by the customer. 

Why is this line on your bill? 

When an energy company installs electrical service for a commercial customer, there is often a substantial investment. All power lines, transformers and measuring equipment must be sized according to the expected demand. In order to recover this investment over a certain period of time, the contract capacity specifies the minimum demand (kW) which may be used in billing charges.