KPA NEWS CONTENT SERVICE
The Kentucky Public Service Commission (PSC) Thursday accepted
broad-based settlements in two cases establishing new environmental
compliance plans and associated environmental surcharges for Kentucky
Utilities Co. and Louisville Gas & Electric Co., meaning local KU customers will be paying about 10 percent more for their monthly bills.
The compliance plans are intended to meet the requirements of several
U.S. Environmental Protection Agency (EPA) regulations affecting
coal-burning electric power plants, according to a PSC press release.
Since 1994, a law enacted by the Kentucky General Assembly has entitled
coal-burning utilities such as KU and LG&E to recover environmental
compliance costs separately from their general rates. The costs are
recovered through a surcharge that appears as a separate item on
electric bills.
In orders issued Thursday, the PSC said the settlements "when viewed in
total, represent the most reasonable and cost effective course of action
for (KU and LG&E) to meet their environmental obligations under the
EPA regulations under consideration in this case."
KU and LG&E sought PSC authorization to spend a total of about $2.5
billion to comply with the new federal environmental requirements. The
settlement reduces the cost of KU’s compliance plan by about $225
million.
The utilities originally estimated that total electric bills for
KU residential customers would see total bills increase by
about 12.2 percent over that same time. The settlement reduces the
increases to an estimated 9.65
percent for KU customers.
KU estimates
that the monthly bill for a customer using 1,000 kilowatt-hours per
month (a kilowatt-hour is the amount of electricity used by a 100-watt
light bulb in 10 hours) will see an increase $7.47 by 2016 - $1.99 less
than under the original proposal.
KU has about 506,000 electric customers in 77 counties across Kentucky, which includes all of Marion and a portion of southern Crittenden County.
The PSC has produced a narrated slide show explaining how it reviews
coal-related environmental compliance costs incurred by electric
utilities. The presentation explains the legal basis for the recovery of
environmental costs, the PSC’s review process and the environmental
surcharge through which the costs are passed on to a utility’s
ratepayers.
The video, which is about 10 minutes long, is available at this web address:
http://www.youtube.com/watch?v=IvGmPHRtdNk
