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PSC To Hold Rate Case Hearing In Louisville Monday

by Gabe Bullard

The Kentucky Public Service Commission will hold a public meeting in Louisville Monday on a proposed utility rate increase.

Louisville Gas and Electric and Kentucky Utilities have asked the PSC to approve a rate increase. The money would be used for infrastructure improvements and to recoup losses from ice and wind storms.

The PSC is holding a series of public meetings across the state to hear from customers about the rate case. Spokesperson Andrew Melnykovych says the meetings are just to hear from customers, and not to explain why the increase has been requested.

“There’s no Q&A or back and forth or anything of that nature,” he says. “It’s very much focused on getting comments from members of the public.”

The meeting will be at 5 pm at Male High School. Melnykovych says LG&E’s impending sale will not affect the PSC’s decision in the rate case.

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Local News

LG and E, KU: Ike And Ice Costs Total $134 Million

From Kentucky Public Radio’s Tony McVeigh

Two major power utilities in Kentucky are establishing separate accounts to recoup damage costs associated with last January’s debilitating ice storm.   

 Fifty-one percent of LG&E’s customers, mostly in Jefferson County, lost power during the ice storm.  Forty-percent of Kentucky Utilities’ customers were impacted, but damage to KU’s system was more severe, since most of the outages were in hard-hit Western Kentucky. 

KU wants to recoup $62 million in damage repair costs.  LG&E wants $45 million. 

 The Public Service Commission is allowing each to establish separate accounts in those amounts, which the companies will try to recover through future rate increases.  But the accounts are no guarantee of recovery.  Both utilities must file rate cases with the PSC and seek approval for the recovery costs. 

Both utilities also established separate accounts to recoup losses suffered last year from the remnants of Hurricane Ike.  Combined, the utilities now have $134 million in deferred storm-related costs.

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Utility Companies are Preparing for Smart Grid

Utility companies across the country are trying out technologies for a new generation of power grid. The so-called ‘smart grid’ includes not only power transmission to customers, but two-way communication between the company and households. WFPL’s Stephanie Sanders reports on those efforts in Kentucky, and how the upgrades could affect consumers.

envisioncenter1In Erlanger, Kentucky, there is an education center operated by Duke Energy. It’s called The Envision Center, and it features a movie-set-like town that utilizes smart grid.

This is where Duke Energy introduces utility regulators to their concept of smart grid. It includes everything from distribution lines that can tell when they’ve lost power and re-direct it from somewhere else… to a smart refrigerator that can skip a defrosting cycle if it’s peak usage time and electricity costs more.

Kathy Meinke leads the tours at Envision Center, and she’s preparing a thunderstorm for the town, to show how the system can repair itself until technicians arrive.

In this case, smart grid seems quite enticing: the two-way communication allowsenvisioncenter2 electric companies to pinpoint where an outage has occurred, and more efficiently restore it.

Inside the home, smart grid technology could provide homeowners with personalized information on where their home is using the most energy, and how they can cut back in certain areas.

Mark Brian signed up for a smart grid pilot program in Louisville with E.ON, the parent company of LG&E. In partnership with G-E, Brian’s employer, each of the two-thousand households in the program received a full suite of smart appliances.

“My wife joked that I was turning our house into a science project,” he says.

envisioncenter3Brian says in his home, with his wife and daughters, ages 8 and 13, they managed to cut their energy bill by 20-percent. But, he says, if he had to pay for all the appliances…

“For the money I’m going to have to shell out for it or the higher rates, I would want there to be a carrot out there,” says Brian.

LG&E is hoping that carrot is a range of different rate packages. Vice-President of Energy Delivery John Malloy says, for example, customers would be able to choose a package that would provide lower rates for running appliances during the overnight hours, when most people aren’t using energy, and higher energy rates at high-usage times. There would also be an even higher rate if the energy system reaches peak-usage.

“That’s if the consumption gets so high that our costs are going to go way up if we have to serve it… to try to drive people’s decisions to a cheaper period,” says Malloy.

envisioncenter5So they’re hoping when you see that higher price signal in your home, you’ll choose to turn off the air conditioner or run the dishwasher a little later. Nice, right? But what’s in it for a company that literally makes its money selling kilowatts?

“The real story about smart grid and utilities is that it changes their business model,” says Peter Fox-Penner, a Principal with the Brattle Group, a research and consulting firm. He specializes in economic, regulatory and strategic issues in network industries.

Right now, utilities make money selling actual power and on structural investments – like the estimated two-billion dollars LG&E would spend in rolling out smart grid technology. Much of that project will be paid for with rate increases, if approved by the Public Service Commission. But how would this new model work?

“In the future, it’s quite possible that services will be charged differently in the utility industry,” says Fox-Penner.

envisioncenter4He thinks utilities could eventually charge for services instead of the amount of energy you use. He thinks maybe a lighting charge, or an air conditioning charge wouldn’t be out of the question, to replace the current method of measuring kilowatts.

The companies we spoke with for this story haven’t disclosed whether they’re considering such a concept.

But LG&E is planning to go before the PSC later this year with a proposal for an education program, to let their customers know what to expect from smart grid, because as the company’s John Malloy put it, ‘smart grid is coming, the question is when.’

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Local News

Customers to See Changes in LG&E Bills in April

Louisville’s utility company is upgrading it’s computer system, meaning customers will see some changes on their bill.  LG&E spokesperson Chris Whelan says customers will get new account numbers, which will provide perks down the road.

“In the future we’ll be able to log a storm outage, or an outage of any kind, online,” says Whelan.  “You will also be able start or stop service online, so there are some definite enhancements, but in the changeover, we expect that to be seamless for customers.”

Whelan says if customers have online bill-pay or pay through a program like Quicken, they’ll have to change their account number next month. 

Another change involves the monthly due date.  Instead of fifteen days from the billing date, the new due date will be twelve days from the billing date.  But Whelan says there won’t be any late charges until bills are more than 15 days late.   

The change was made to streamline the LG and E and Kentucky Utilities billing systems. 

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Local News

Freezing Rain Causes Widespread Outages (Update)

About 100,000 Louisville Gas and Electric Company customers in the Louisville area were without power at midday today, as freezing rain has brought down numerous tree limbs and power lines.

The precipitation turned to snow before moving out of the Louisville area late this morning.

About 176,000 Kentucky Utilities customers were also without power across the state.

Chris Poynter with the mayor’s office says people are still being asked not to venture out unless  necessary, as some roads are still blocked by fallen tree limbs or utility lines.

Motorists who encounter a malfunctioning traffic light should treat the intersection as a four way stop.

Governor Steve Beshear has declared a state of emergency across Kentucky in the wake of the storm.

(Photo By Todd Earwood)

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Local News

LG&E Hopes to Pass Along Windstorm Costs to Consumers

Louisville Gas and Electric wants to pass on the costs the company incurred from the September windstorm to customers starting as early as next year. The company has filed a report with the Public Service Commission, asking the PSC to deem the costs a ‘regulatory asset’, which could be included in a pending rate increase request.

LG and E spokesperson Chris Whelan says recovery from the windstorm cost the company about 35-million dollars.

“Basically that is divided into two parts, 26-something-point-something is in O&M, which means its labor and operations and maintenance,” says Whelan, “and then the other 8-something is based on capital expenditures, which is poles and wires and transformers and so forth, that were put in place during the windstorm.”

Whelan says it would add a monthly fee of less than a dollar to residential bills.

“It is not based upon usage; it’s based across the board. We have various levels of customer classes, business, commercial and residential, but the 75-cents is basically what we expect it will cost for a residential customer over the next five years, per month, for their bill,” says Whelan.

Whelan says a decision from the PSC on the windstorm cost request could come within a week.