By Tom Latek
Kentucky Today
Duke Energy Kentucky gets an increase in base rates, but not quite the entire natural gas rate hike they requested, according to a settlement order issued by the Kentucky Public Service Commission on Tuesday.
Duke Kentucky filed its application on June 1, 2021, seeking an increase in natural gas base rates of $15.2 million, or 13.66 percent. The company requested a return on equity, or ROE, of 10.3 percent.
A settlement agreement, or stipulation, submitted Oct. 8 by Duke and the Attorney General’s office, which is required by law to intervene in rate hike cases, proposed a $9.36 million, or 8.4 percent, increase in base rates.
However, Tuesday’s Order authorizes a $9.17 million increase in base rates, which is about an 8.21 percent increase over the company’s existing revenue. For residential customers, this would amount to approximately a 6.27 percent increase over existing rates.
The PSC conducted information sessions and public meetings for the purpose of taking public comments on Oct. 12. Due to COVID-19, the information sessions and public meetings were conducted virtually. The PSC also conducted a formal evidentiary hearing on Oct. 18, 2021, for the purposes of cross-examination and for consideration of the settlement agreement. The order approves the stipulation with modifications. The PSC notes that approval is based only on the finding that the stipulation is reasonable and in the public interest and does not establish a precedent.
Among the provisions in Tuesday’s order:
• The Commission authorized an ROE of 9.375 percent for Duke Kentucky’s base rates and an ROE of 9.3 percent for its natural gas capital riders. In approving the stipulation’s proposed ROEs, the Commission noted its most recent authorized ROE determinations and considered the risk associated with the stipulation’s 4-year “stay out” provision, in which Duke Kentucky agreed not to seek another rate increase for 4 years absent an emergency.
• The monthly customer charge increases from $16.50 to $17.50.
• Duke Kentucky must file a formal application before seeking emergency rate relief prior to the end of the 4-year stay-out period.
• Duke Kentucky is to waive late-payment charges for residential customers who receive a pledge or notice of low-income assistance from an authorized agency. The company must report annually on the number and dollar amount of late payment charges waived. For other residential customers, the late-payment charge does not have to be waived; however, the company must provide formal cost support for the appropriate late payment charge in its next general rate case.
• The Commission approved the company’s request to increase its reconnection fee to $90 but denied the company’s request to add a field collection fee to its tariff.
Duke Kentucky serves about 101,000 natural gas customers in Northern Kentucky.
