Kentucky Public Service Commission Approves Fuel Adjustment Clause Increase for Louisville Gas & Electric Company

Strategic Insights -

The Kentucky Public Service Commission (PSC) has approved a fuel adjustment clause (FAC) increase for Louisville Gas & Electric Company (LG&E), effective June 1, 2024. The proposal, submitted by LG&E, aimed to increase the amount of fuel costs included in base rates, resulting in a $0.00512 per kilowatt hour (kWh) increase. After reviewing the evidence, the PSC found that LG&E's proposed base period fuel cost of $0.02860 per kWh was representative of the current fuel costs experienced by the company. The PSC also determined that LG&E's current base fuel cost of $0.02348 per kWh was below the average cost billed in the last year of the two-year review period, which was $0.03000 per kWh. As a result, the PSC approved LG&E's proposed increase, effective June 1, 2024.

Key Takeaways:

  • The Kentucky Public Service Commission approved a fuel adjustment clause (FAC) increase for Louisville Gas & Electric Company (LG&E), effective June 1, 2024.
  • The proposal, submitted by LG&E, aimed to increase the amount of fuel costs included in base rates, resulting in a $0.00512 per kilowatt hour (kWh) increase.
  • LG&E's proposed base period fuel cost of $0.02860 per kWh was approved, which is higher than the current base fuel cost of $0.02348 per kWh.
  • The average total fuel cost for the 24-month period under review was $0.02681 per kWh, with a range from $0.02282 per kWh in November 2020 to $0.03602 per kWh in June 2022.
  • LG&E's base energy rates will increase by $0.00512 per kWh, effective June 1, 2024, to reflect the increase to LG&E's base fuel costs.
  • The PSC approved the charges and credits applied by LG&E through the FAC for the period from November 1, 2020, through October 31, 2022.

Statistics:

  • Average total fuel cost for the 24-month period under review: $0.02681 per kWh
  • Range of fuel costs: $0.02282 per kWh in November 2020 to $0.03602 per kWh in June 2022
  • Proposed base period fuel cost: $0.02860 per kWh
  • Current base fuel cost: $0.02348 per kWh
  • Approved increase: $0.00512 per kWh
  • Effective date of increase: June 1, 2024

Sources:

  • Commonwealth of Kentucky, Public Service Commission, Order, Case No. 2023-00011 (May 06, 2024)
  • Direct Testimony of Andrea M. Fackler (filed Sept. 22, 2023) (Fackler Testimony)