LG&E Utilities Implementing PBR
LG&E Energy Corp. utility subsidiaries Louisville Gas and
Electric and Kentucky Utilities received orders from the Kentucky
Public Service Commission (PSC) implementing performance-based
ratemaking (PBR) effective July 2.
As part of an amended LG&E PBR filing, LG&E also agreed
to refrain from filing for an increase in gas rates through June
30, 2004. The amendment requested PSC approval of a five-year bill
reduction plan, which would reduce electric costs by $20 million in
the first year (beginning July 1), and by $8 million annually for
each of the next four years through June 30, 2004, for a total
five-year savings to customers of $52 million. The reductions will
be distributed 47% to LG&E and 53% to KU customers.
The commission is expected to issue a final PBR ruling later
this summer. The amended PBR filing calls for LG&E and KU to
extend for an additional year (through June 30, 2004) both the rate
cap and the merger-savings credit the utilities established as part
of their earlier merger plan. Under the rate cap, the companies
agreed, in the absence of extraordinary circumstances, not to
adjust base electric rates for five years following the merger.
They also agreed to a monthly credit to customer bills reflecting
the 50% share of the non-fuel merger savings allocated to customers
in the first five years following the merger.
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