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January 21, 2010

Kentucky Utilities seeks 11.5 percent rate increase

Kentucky Utilities Company has announced it is requesting a $136 million base rate adjustment to cover the costs, for the most part, associated with meeting the growing customer demand for energy.

KU and its sister company, Louisville Gas and Electric Company, have invested more than $1.2 billion in additional generation and infrastructure improvements to ensure safe and reliable service. In addition, the utilities invested more than $133.7 million following two historic storms in 2008 and 2009. The companies are requesting that the costs associated with the fall windstorm and the winter ice storm be spread over the next five years.

With the requested 11.5 percent overall annual increase, KU’s residential base rate costs per kilowatt hour (kWh) would be 8 cents. The average U.S. residential rate is 11.96 cents per kWh and the average of the seven surrounding state to Kentucky is 9.94 cents per kWh.

A residential KU customer using an average of 1,230 kWh, is expected to see an increase of $11.85 per month, based on the residential increase of 13.7 percent.

“We understand that, in this sluggish economy, any additional costs are burdensome for our customers,” said Victor A. Staffieri, Chairman, CEO and president of E.ON U.S., the parent company of KU and LG&E.; “We are fortunate to have some of the lowest rates in the country and even with this proposed increase, our rates will still be lower than six of the seven states surrounding Kentucky. However, we’ve made significant infrastructure investments to ensure that we continue to provide safe, reliable, clean energy. One investment is a new Trimble County generating unit, that when it comes online next summer will be one of the cleanest coal-fired plants in the country. It will also be our lowest-cost plant to operate and will be vital in meeting the growth in customer demand on our system.”

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