Ice Storm-Related Utility Rate Hikes Possible

by Rick Howlett on March 5, 2009

From Kentucky Public Radio’s Tony McVeigh

The long-term effects of this winter’s ferocious ice storm in Kentucky may include utility rate increases linked to clean-up and repair costs.

Utility damage estimates from the ice storm exceed $250 million , says Andrew Melnykovich of the Kentucky Public Service Commission.

Utility cooperatives may be able to recoup most of their repair damage from federal disaster funds, but Melnykovich says that’s not the case for investor-owned utilities.

“And those would be LG&E, Kentucky Utilities, Duke Energy Kentucky and Kentucky Power, which is part of the American Electric Power system,” he said.

He says the four spent around $120 million on storm repairs, which they eventually may try to recover from ratepayers. “For example, for LG&E and KU after Ike, it was a total of, between the two of the them, about 25-million dollars.”

Melnykovich says any requests by utilities to recover storm repair costs would he considered during regular rate hike hearings.

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