(WHAS11) - LG&E and Kentucky Utilities have reached an agreement on a settlement with several groups that had objected to a record rate hike request.
The agreement calls for a rate hike 25 percent lower than the original $250 million rate hike request, or about $189 million.
Interveners who had objected to $250 million rate hike have agreed to the $189 million rate hike settlement. All parties, except the Attorney General, petitioned the Public Service Commission to accept the settlement.
It is not clear, however, how the Public Service Commission will rule. However, the Attorney General's Office of Rate Intervention tells WHAS11 News that it is adamantly opposed to even the lower rate hike and intends to argue that electric rates should be decreased.
The PSC denied Conway's motion to dismiss the rate hike request. Conway had argued that because LG&E and KU are in the midst of being sold, that the Pennsylvania based buyer should make its own case for the $250 million rate hike.
Attorney General Jack Conway’s office issued the following statement Tuesday, after the Public Service Commission (PSC) denied its request to dismiss the LG&E and KU rate cases, allowing a hearing on the matter to proceed in Frankfort.
“We are disappointed in the Public Service Commission’s decision today not to grant our motion to dismiss the LG&E and KU rate increase cases due to the pending sale of their parent company, Eon. However, we are pleased that the Commission has provided us the opportunity to further develop the issues we are concerned about during the course of the hearing and renew our request for dismissal at a later point in the proceedings. We will continue our vigorous representation of Kentucky ratepayers throughout this hearing.”
WHAS11 News will speak with LG&E, the Attorney General's office and one of the interveners and will bring you the latest beginning at 5 p.m.
Last Week:
Citing the pending sale of LG&E and KU to Pennsylvania Power and Light, Kentucky Attorney General Jack Conway on Wednesday filed a motion to dismiss a rate hike request by the utilities.
Conway says the utilities' German parent, Eon-U.S. might be using ratepayers to make LG&E and KU more attractive companies to Wall Street.
Conway's reasoning in the motion for dismissal is that it is "inappropriate" for the PSC to consider simultaneous requests from Eon, the $250 million rate hike request and the request to approve of the sale of LG&E and KU to Pennsylvania Power and Light.
"It's not appropriate, it's not right and it's not fair to the ratepayers to allow these to go forward at the same time," Conway said.
LG&E says it plans to respond to Conway's motion by this Friday.
"The merger and the request to increase base rates on the electric and natural gas side are two different processes, altogether," said LG&E spokesperson Brian Phillips.
The nearly $250 million rate hike request would add about $14.00 per month to the average LG&E customer's bill.
The utility says it covers:
- a new Trimble County power plant,
- enhancements to operations
- costs from the 2008 windstorm and 2009 icestorm
In April, Eon U-S announced its intent to sell the utilities for $7.6 billion. Conway says let the new owner make its own case.
"I don't think this particular rate increase which the companies admitted raises the credit profile and makes Eon U.S. a more attractive target is the appropriate time to go forward with such a rate increase," he said.
Asked if the rate hike is a way to make the utilities a more attractive target, Phillips said, "No. Again, they are two separate and distinct processes. Regardless of who our owner is, we still have to continue to provide safe and reliable service to our customers."
Conway first announced the dismissal motion last month, as then Democratic Senate primary rival Daniel Mongiardo accused him of a conflict of interest because lobbyists for LG&E and KU hosted a Conway campaign fundraiser.
"I'm going to be turning down any campaign contributions from these companies while they have anything pending in front of the commission," Conway said during the Wednesday news conference.
Yet, the Conway Senate campaign declined to say whether Conway would return any previous contributions from utility connections.
In response to a question about the previous contributions, campaign spokesperson Allison Haley issued a statement:
"Jack Conway has a clear record of standing up for consumers while Rand Paul is defending corporations like BP. We're happy to let voters decide which they think makes a better Senator for the Commonwealth."
Regardless of when the Public Service Commission eventually hears the request, Conway says a rate hike is not inevitable.
"In fact," Conway volunteered, "Our expert thinks there may be some overearning on the part on the electricity side. and our expert is actually prepared to testify for a rate decrease on the electricity side."
While the Public Service Commission rules on rate hike requests, the Attorney General does play a role through the Office of Rate Intervention which can fight rate hikes and negotiate settlements. The PSC has a hearing on the rate hike on Tuesday, June 8.
