UTILITY RATES

Please lend your voice today!

LG&E seeks to raise and restructure residential and commercial rates in regressive ways. 

LG&E has filed another case with the Ky. Public Service Commission (PSC), seeking to raise and restructure its gas and electric rates in regressive, anti-consumer ways.  (Its sister utility, Kentucky Utilities, sells power only and filed a similar case.)  If this investor-owned monopoly has its way:

  • Mandatory, fixed monthly "service fees" for residential and commercial customers would rise by 15%-20% and 11%-20%, respectively.*  These charges don't vary with how much gas or power is used. Increasing fixed charges cuts customers' ability to manage their bills by conserving, as well as the paybacks on their investments into energy efficiency or solar power. 

  • Usage or consumption rates based on consumption would go up, too.  Residential customers would pay 13% more for electricity and 16% more for gas; commercial customers would pay 17% more for electricity and 10% more for gas, including already beleaguered restaurants, daycare centers, etc.

  • Net-metering would be rigged in the utility’s favor.  LG&E would sell customers' excess, daytime solar power to other customers for 4-5 times what LG&E would pay the solar customers who produced it.  Then, LG&E would charge solar customers 4-5 more when they drew power at night or whenever they needed more power than they generated, slowing the payback on customers' solar panels. 

Though many customers already face economic hardship due to the COVID19 pandemic, the typical LG&E residential customer would pay $277/year more.


LCAN's perspective:

 

  • Utilities are allowed to operate as monopolies and earn near-guaranteed profits.  In exchange, their ability to raise rates is limited, and they're subject to other regulations.  They must serve customers equitably, reliably and safely, in ways that "free-market" businesses are not. 

  • Utility regulation is an expression of public policy.  Without regulation, the availability, quality and cost of service would vary greatly, based on customers' locations.  (The differences in internet and cell-phone service in urban and rural areas is huge, because neither utility is meaningfully regulated.) 

  • Driving an ever-growing portion of bills into fixed charges reduces incentives to invest in efficiency.  (For comparison, see your combined Louisville Water Co. and Metro Sewer District bill.  For a typical residential customer, fixed charges make up 60% to 70% of the total bill, meaning conserving water has relatively little effect on the total bill.)

  • Increasing energy conservation and efficiency are sound public policies that have been in place in Kentucky for decades.  Any increases to LG&E should support those policies by coming through usage charges.  Doing otherwise is unfair to customers who invest in weatherization, more efficient appliances or solar panels, as well as customers who turn their thermostats down, put on a sweater, etc. 

  • Paying or crediting solar customers at the wholesale rate for their excess daytime power is incoherent.  Large power generators require costly transmission infrastructure across long distances to get their power to LG&E's customers.  LG&E incurs little to no cost when rooftop solar power flows to neighboring homes or businesses. 

  • Interest rates are record low now, making utility stocks very attractive, reliable investments.  LG&E doesn't need a higher Return on Equity to attract investors.  

  • The PSC shouldn't let LG&E maximize its stockholders' returns on the backs of captive customers, especially during a global pandemic with extreme unemployment.

Update:  On April 19th, before the final public hearing, LG&E-KU and the intervening parties announced they'd negotiated a settlement the previous week.  LCAN is evaluating the still to be approved terms and will update this page soon.  Meanwhile, please see media coverage here.

* See LCAN's summaries of the lengthy public notices for LG&E residential and commercial customers and KU commercial customers.

© 16 July 2021

by Louisville Climate Action Network

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Louisville KY, 40204

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