PSC Approves Measure That Could Allow LG&E to Recover August Storm Costs

by Erica Peterson on December 27, 2011

The Kentucky Public Service Commission has agreed to let Louisville Gas and Electric take the first step in a process to recover money spent on damage from August’s storm.

Nearly one-third of LG&E’s customers lost power during a wind storm in August. Most of those outages were in Jefferson County. The company got power restored in four days, but required LG&E to bring in contractors from out of state and cost a lot of money.

LG&E spokeswoman Liz Pratt says the money LG&E spent on storm recovery in 2011 is nearly triple the amount the company budgeted for emergencies.

“We budget for normal storm recovery but extended storms with the magnitude and the damage like we had in August are above and beyond normal storm recovery,” she said.

Now, the PSC has agreed to let LG&E set up a separate account called a regulatory asset to track the expenses associated with the storm. Pratt says that could lay the groundwork for a rate increase request later on.

“A regulatory asset treatment is only the first step,” she said. “And what that means is that these costs associated to that power restoration and recovery could be filed as part of a future rate case.”

Pratt says the new account doesn’t mean the company will definitely seek a rate increase, and if it did, the increase would still have to be approved by the PSC.

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