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KU wants to zap electric bills 13.7%

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Request would increase average bill $140 a year

By Ben Carlson

Kentucky Utilities wants to raise residential electric rates 13.7 percent, and some of its customers are speaking out against the request.

The company says the increase is needed to cover growing demand for electricity, higher operating costs and to offset its $133.7 million investment following a major windstorm in 2008 and ice storm in 2009.

The company has 6,378 residential and business customers in Anderson County. The company’s overall request is for an 11.5 percent increase, which includes an 11.1 percent increase for industrial customers.

The rate increase would add around $140 per year ($11.85 a month) to the average homeowner’s electric bill, according to a KU news release. It first has to be approved by the state’s Public Service Commission. If approved, the rate increase would likely begin in five to six months, a company spokesperson said.

The request isn’t sitting well with readers of The Anderson News, who responded to an e-mail request from the paper to share their thoughts.

“How can these people even sleep at night?” said Kimberly Wallace. “It’s hard enough to pay bills and get by now.”

Readers Randall and Linda Shouse said the increase would be particularly hard on seniors.

“We, as seniors, did not get an increase for 2010 and feel that this is a ridiculous amount to be sending our way,” they wrote. “We will have to live off the same amount as last year and we feel that Kentucky Utilities should have to keep the same rates as last year.”

Company spokesperson Chip Keeling said KU and its sister company Louisville Gas and Electric have not had a rate increase approved since 2003, and that a request to have rates increased in 2008 resulted in a rate reduction.

The company said even if the requested increase is approved later this year, KU’s electric rates would still be cheaper (8 cents vs. 9.94 cents per kilowatt hour) for the seven states that surround Kentucky.

He said the national average is 11.96 cents per kilowatt hour.

“We understand that, in this sluggish economy, any additional costs are burdensome for our customers,” Victor A. Staffieri, chairman, CEO and president of E.ON U.S., the parent company of KU and LG&E, said in a news release. “We are fortunate to have some of the lowest rates in the country and even with this proposed increase, our rates will still be lower than six of the seven states surrounding Kentucky.”

Reader Bonnie Phillips a nearly $12 a month increase will pose a significant burden on people on fixed incomes.

“A $12 a month increase will probably cause some, especially those on Social Security, to choose be go without medications or cut back on food,” Phillips said.

“I don’t fee we should have to suffer more than we already have because of the ice storm. Why should we have to pay their wages? I hope there is someone out there who can step in and stop such an outrageous increase.”

Reader Jim Walker said the “domino effect” of the proposed increase would drive up prices for all goods and services, and doubts that the imbedded school tax KU customers pay with their electric bill will be reduced.

“Has the school board considered reducing the 3 percent tax that is added to the electric bill? I would say not,” said Walker. “The higher your utility bill the more tax money the school board will receive.”

Walker added that concerned citizens should know what portion of the increase would be spent on personnel payroll and perks.

“Before raising taxes and costs, the question should be how can we cut costs without raising taxes?” he said.

Company officials said KU’s customer base has increased 60 percent and demand has doubled since its last generating plant was built in 1984. A new $1.2 billion plant KU has planned in Trimble County is designed to meet that demand, along with 55 miles of transmission lines.

The windstorm in 2008 — the one that blew the roof off a portion of the grandstand at the American Legion in Lawrenceburg — knocked out power for 75,000 KU customers. Company officials said 143 poles had to be replaced, along with 133 transformers.

In 2009, the ice storm knocked power out to 400,000 KU and LG&E customers and resulted in 20,400 downed wires and 2,293 broken poles, according to the company, which added that KU is requesting to spread the cost of the two storms over a five-year period.

Also driving the requested increase are higher operating costs, increased property taxes, and higher insurance, medical and pension benefits, company officials said.

Staffieri, the president and CEO, encouraged customers to take advantage of the company’s energy efficiency programs.

E-mail Ben Carlson at bcarlson@theandersonnews.com.