KU’s rates suspended through PSC until April

Published 6:35 am Thursday, October 18, 2018

The rate-hike request through Kentucky Utilities — which would total an estimated 32 cents more per day for residents — has been suspended until April. However, according to the Public Service Commission, the utilities company could move forward with the increase before it’s approved or denied.

Andrew Melnykovych, public information officer for the PSC, said KU had to file for new tariffs for the new rates. “The normal suspension is 30 days, but that doesn’t give us enough time to adequately review the application. The commission is allowed to suspend the rates for an additional period to review, and in this case, it’s until the end of April.”

Melnykovych said if the PSC doesn’t render a decision by that time, KU is legally allowed to put the new rates into effect, but they will be subject to refund if the utilities company gets a lower rate approved — meaning they’d have to refund whatever’s over the approved amount back to customers, along with interest.

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“It’s up to the utility on whether or not they want to take that chance,” he said.

Many in the local community have been asking about public meetings or a hearing, which are two different animals, Melnykovych said.

He said generally in a major rate case, there’s always an evidentiary hearing, which is a legal proceeding before the PSC in Frankfort and may extend over several days. KU is required to publish a notice in local newspapers “not less than seven days nor more than 21 days before the date of the hearing,” he said.

The public meetings take place out in the utilities’ service territory — but “They’re not required, by the way,” Melnykovych said. “But if there is one, typically the way that goes is it will occur sometime prior to the hearing, so that any comments received can potentially be used to create some lines of questioning at the hearing for the utility.”

Melnykovych said that based on the last several rate cases involving KU, “at a minimum, there will be one public meeting, if precedent holds. If we hold only one, it generally will be in Lexington, which is the center of the service territory.”

Also, because public meetings aren’t legally required, KU is under no requirement to give a notice of the meetings.

“But the PSC gives notices of a public meeting via news release several weeks in advance, followed by a reminder a week or so in advance. We also place a notice on the PSC website,” he said.

The PSC has, on occasion, Melnykovych said, held more than one public meeting, but typically they’ve been held out in other parts of the utilities’ service territory — which spans as far as Paducah.

“If we hold more than one, they’ve typically been held some place like Middlesboro or Madisonville, which is the eastern and western part of the service territory. Although those have been fairly sparsely attended in the past,” he said.

The first part of the meetings are an informational session, which is led by the PSC staff, in which the rate-making process is explained and the basics of the case are presented in terms of what KU is asking for. This part of the meeting is “off the record,” as in not recorded for use in the evidentiary hearing.

If an evidentiary hearing is held, it would probably be around March; then the public meeting would be three to four weeks before that — late February or early March, Melnykovych said.

When asked how the public may voice its concerns about having a public meeting for input, Melnykovych said, “We’ve already received a number of requests for that, so we’re very much aware that the people are wanting a public meeting. Again … it would not be at all unusual to hold a public meeting for a KU rate case.”

He said there have been cases when an evidentiary hearing has been set, and a utility has not demonstrated it has provided sufficient notice.

“We’ve had cases where utilities hearings have been scheduled and we find out not enough notice has been given, and everybody goes home.”

The notice of the rate-hike request came in the form of a news release last month from Louisville Gas & Electric, of which KU is a subsidiary. The announcement was at the bottom of an extensive press release about the company making “system-wide enhancements to further improve safe, reliable service.”

The release said LG&E and KU have requested “green tariffs” within the rate review requested on Sept. 28, which it said will “further promote renewable energy growth and economic development in Kentucky.”

Power plant investments were also listed, including a replacement gas line being installed for combustion turbines at E.W. Brown Generating Station, in Mercer County.


To submit a comment or inquiry about a Public Service Commission case, email  psc.info@ky.gov, or call (502) 564-3940. All case-related comments submitted online or by other means become a part of the official case record, and all documents — including requests to intervene in rate adjustments — are publicly available online at psc.ky.gov.