Kentucky Public Service Commission Approves QIP Charge Increase for Kentucky-American Water Company

Strategic Insights -

The Kentucky Public Service Commission has issued an order approving the increase of the Qualified Infrastructure Program (QIP) charge for Kentucky-American Water Company from 11.06 percent to 11.09 percent. The increased charge will result in a monthly increase of $0.01 for average residential customers. The QIP charge is applied as a percentage to all water revenue, excluding other surcharges or taxes, and is displayed as a separate line item on customer bills. The commission found that Kentucky-American's proposed increase in the QIP charge is reasonable and should be approved, as it reflects actual recovery amounts for the QIP rider.

Key Takeaways:

  • The Kentucky Public Service Commission has approved the increase of the Qualified Infrastructure Program (QIP) charge for Kentucky-American Water Company from 11.06 percent to 11.09 percent.
  • The increased QIP charge will result in a monthly increase of $0.01 for average residential customers.
  • The QIP charge is applied as a percentage to all water revenue, excluding other surcharges or taxes, and is displayed as a separate line item on customer bills.
  • Kentucky-American must file its revised tariffs setting out the rates authorized in this Order, and the revised QIP Rider, within 20 days of the date of this Order.
  • The commission found that Kentucky-American's proposed increase in the QIP charge is reasonable and should be approved, as it reflects actual recovery amounts for the QIP rider.
  • The QIP Rider is based on a revenue requirement that is the sum of the pre-tax return for qualified additions and removal expenditures, plus the depreciation and property tax for the proposed projects in the forecasted test year.
  • The QIP Rider is applied as a percentage to all water revenue, excluding other surcharges or taxes, and is displayed as a separate line item on customer bills.

Programs and Initiatives Mentioned:

  • Kentucky-American Water Company
  • Qualified Infrastructure Program (QIP)
  • Kentucky Public Service Commission

Statistics:

  • 11.06 percent: The original QIP charge percentage
  • 11.09 percent: The new QIP charge percentage approved by the commission
  • $0.01: The monthly increase in the QIP charge for average residential customers
  • $16,066: The QIP Under/(Over) Recovery Variance
  • $119,828,211: The Base Revenues from Case No. 2023-00191
  • 60,078,254: The Prorated QIP 5 Revenue Requirement

Sources:

  • Commonwealth of Kentucky Before the Public Service Commission, Case No. 2025-00099, Order (June 26, 2025)
  • Kentucky-American Water Company, PSC KY No. 9, Seventh Sheet No. 49, Cancelling Sixth Sheet No. 49
  • Case No. 2018-00358, Electronic Application of Kentucky-American Water Company for an Adjustment of Rates (Ky. PSC June 27, 2019), Order
  • Case No. 2023-00300, Electronic Application of Kentucky-American Water Company for a Balancing Adjustment for its QIP Charge, (Ky. PSC Aug. 12, 2024), Order
  • Case No. 2020-00027, Electronic Application of Kentucky-American Water Company to Amend Tariff for the Establishment of Qualified Infrastructure Program Charge (Ky. PSC June 17, 2020) Order