LG&E, KU Reach Settlement on Utility Rate Hikes in Kentucky
Kentucky residents might still experience an increase in their utility bills following a new settlement agreement between LG&E and KU and key stakeholders. The agreement, which was filed with the Kentucky Public Service Commission on October 20th, awaits commission approval. This marks the first time since 2020 that LG&E and KU have requested a rate hike.
The settlement comes after months of deliberation, beginning with the utilities’ initial request to increase rates in May. The original proposal had significant impacts anticipated for customers: KU residential customers could have seen an increase of around $18 per month, while LG&E electric and natural gas customers could have experienced increases of approximately $11 per month.
However, the new settlement aims to minimize the impact on monthly bills by limiting how much they will rise. This article provides a comprehensive overview of the agreement and its implications for Kentucky utility customers.
Why Are Utility Rates Going Up in Louisville and Kentucky?
Utility officials have explained that the rate hikes are essential for infrastructure upgrades and technology improvements. By increasing rates, LG&E and KU can support projects designed to mitigate the effects of storms, meet growing energy demands, and enhance service quality.
In a statement, the utilities emphasized the age of their equipment: 55% of wooden transmission poles are over 60 years old, and some substation equipment is nearly 100 years old. John Crockett III, president of LG&E and KU, stated that they understand the impact any increase in customer bills can have and want to assure customers that these changes will allow them to continue making necessary system enhancements, upgrade aging equipment, and improve service for their customers.
How Will the Agreement Impact Kentucky Utility Bills?
Under the proposed rates, KU residential electric customers could see an increase of $9 per month on their bills, while LG&E residential electric customers may experience a monthly increase of around $5, with natural gas customers facing an approximate $8 per month increase.
These rate increases would provide LG&E’s electric services with an additional $58 million and KU’s operations with an extra $132 million. The utilities maintain that the proposed changes are “well below the rate of inflation” and that residential electric rates will remain more than 24% below the national average.
As part of the settlement, LG&E and KU have agreed to keep base rates constant until 2028.
When Will Rates Go Up for LG&E/KU Customers?
If the Kentucky PSC approves the settlement, customers could start seeing these rate changes as early as January 1, 2026. This article initially appeared in the Louisville Courier Journal: LG&E, KU reach settlement on utility rate hikes in Kentucky.
