Kentucky Utilities and LG&E Agree to Rate Settlements with AG, DoD, and Other Stakeholders

Strategic Insights -

Kentucky Utilities Company (KU) and Louisville Gas and Electric Company (LG&E) have reached a stipulation and recommendation with the Attorney General of the Commonwealth of Kentucky, the Department of Defense, and other stakeholders, including Kentuckians for the Commonwealth, Kentucky Industrial Utility Customers, Inc., and The Kroger Co. The agreement, filed with the Kentucky Public Service Commission (PSC) on April 19, 2021, settles all issues pending before the PSC in Case Nos. 2020-00349 and 2020-00350, with the exception of certain reserved issues.

The stipulation includes a four-year stay-out commitment, where the Utilities agree not to request base-rate increases until July 1, 2025. Additionally, the Utilities will retain the right to seek emergency rate relief under KRS 278.190(2) to avoid material impairment or damage to their credit or operations. The parties stipulate that the Utilities' electric revenue requirements will increase by $77.3 million for LG&E and $115.9 million for KU, effective July 1, 2021.

Key Takeaways:

  • The KY PSC has established a four-year stay-out commitment for KU and LG&E, preventing them from requesting base-rate increases until July 1, 2025.
  • The Utilities will retain the right to seek emergency rate relief under KRS 278.190(2) to avoid material impairment or damage to their credit or operations.
  • The electric revenue requirements for LG&E and KU will increase by $77.3 million and $115.9 million, respectively, effective July 1, 2021.
  • The stipulation includes an agreement to settle all issues pending before the KY PSC, with the exception of certain reserved issues.
  • CG, DoD, and other stakeholders, including KFTC, KIUC, and The Kroger Co., have participated as full intervenors in the Rate Proceedings.

Statistics:

  • $77,300,000: The increase in annual electric revenue for LG&E operations, effective July 1, 2021.
  • $115,900,000: The increase in annual electric revenue for KU operations, effective July 1, 2021.
  • 2021: The effective date of the stipulated electric revenue requirements increases.
  • 2025: The date when KU and LG&E may request base-rate increases under the four-year stay-out commitment.

Sources:

  • STIPULATION AND RECOMMENDATION, Kentucky Utilities Company and Louisville Gas and Electric Company, Attorney General of the Commonwealth of Kentucky, and others, Case Nos. 2020-00349 and 2020-00350, April 19, 2021.