Electric Rate Design and Proposed Tariff Changes in Kentucky

Kentucky Public Service Commission has issued a document regarding the proposed electric rate design and tariff changes by the Kentucky Utilities (KU) and Louisville Gas and Electric (LG&E) companies. The document outlines the companies' approach to electric rate design, which aims to bring the rate structure and charges in line with the results of cost of service studies. The proposed rate design includes increasing the daily Basic Service Charge for residential electric rates, although at a gradual pace.

Key Takeaways:

The companies propose to increase the daily Basic Service Charge for residential electric rates from $0.53 to $0.64 for KU (a 20.8% increase) and from $0.45 to $0.52 for LG&E (a 15.6% increase).
The percentage increase for each residential Basic Service Charge is approximately 150% of the total revenue percentage increase proposed for the residential class for each of the companies (13.6% for KU; 10.1% for LG&E).
The companies propose to increase their residential Basic Service Charges in a direction that will more accurately reflect the actual cost of providing service, although still be less than the full amount of customer-related cost.
Customer-related cost for the residential class is estimated to be $0.81 per customer per day.
The companies will continue to bring the rate structure and charges in line with the results of cost of service studies through their proposed rate design.

Statistics:

Proposed increase in daily Basic Service Charge for residential electric rates: 20.8% (KU), 15.6% (LG&E)
Approximate percentage increase for each residential Basic Service Charge: 150% of total revenue percentage increase proposed for the residential class (13.6% for KU; 10.1% for LG&E)
Customer-related cost for the residential class: $0.81 per customer per day

Sources:

Kentucky Public Service Commission document
Timothy S. Lyons, electric cost of service studies for KU and LG&E