Raising objections to LG&E rate increase request – By Sarah Lynn-Cunningham and Tim Darst
Utilities across the nation, including the Louisville Gas & Electric Co., are trying to raise their meter fees — the monthly sums all customers must pay, whether we use a little or a lot of power or natural gas.
LG&E seeks the Kentucky Public Service Commission’s permission to raise and restructure its rates, by shifting more of its costs to meter fees for gas and electricity and (presumably temporarily) lowering slightly its rates for each kilowatt-hour of power used.
If approved, all residential customers would have to pay $37 every month before ever turning on a light, cooking a meal or heating water for a shower.
We have the following objections:
•Economic injustice: While customers can conserve their use of gas and electricity, they cannot control meter fees. Lower-income households especially would be hurt by $37/month.
Utilities have long been allowed to pass some of their fixed costs to ratepayers through meter fees. However, those costs haven’t changed so radically since 2009 as to justify what would be a 200 percent hike in LG&E’s gas meter fee, much less a 360 percent jump in its electric meter fee.
•Undermining energy efficiency: Raising meter fees and lowering usage fees would cut the savings customers earn by investing in energy efficiency measures to lower their bills. When calculating the payback and return on investment, say, on insulating an attic or buying a more efficient furnace, customers rightly count only savings in usage costs.
•Retarding renewables: Customers who install solar panels for electricity or hot water would see the return on their investments diminish and payback periods, lengthened, because solar customers without back-up batteries still pay meter fees.
Some utilities have claimed that rate restructuring is necessary to protect customers without solar panels from subsidizing customers with panels. In reality, “solar customers” send excess power into the utilities’ grids during the day when overall customer demand is high, and draw power when overall demand is low. Thus, solar customers help to level demand, helping utilities to operate more efficiently and cost effectively.
•The Clean Air Act: The U.S. Supreme Court has ruled three times that the EPA must apply the Clean Air Act to the carbon pollution that causes climate change. New, game-changing regulations soon will require Kentucky to make big cuts in power-plant emissions.
Energy efficiency and renewable energy sources are our cheapest, cleanest and fastest options for meeting those requirements. Beyond a more stable climate, they offer lasting economic benefits. Utility bills would be lower, and thousands of jobs would be created throughout the state.
The health benefits of reduced air pollution cannot be overstated. Louisville and Lexington have some of the worst air among the 100 largest U.S. cities, according to the Brookings Institute, chiefly due to our power plants. A Harvard University study showed that states with our reliance on coal had higher mortality rates from air pollution.
The last thing the Public Service Commission should do is allow rate restructuring that undercuts the business case for energy efficiency and renewables.
•Monopoly over-reach: LG&E is a “natural monopoly,” authorized to provide essential services where market mechanisms would be impractical. Instead of multiple utilities each laying power and gas lines, the government authorizes one utility to operate a monopoly, albeit with added regulation to protect consumers. But the concept wasn’t intended to allow utilities to protect themselves from alternative technologies, such as energy efficiency and solar rooftops, as would this rate restructuring.
In short, restructuring seems much more about ensuring a monopoly’s profits than about fairness toward customers, much less about working toward a cleaner, healthier and more sustainable Kentucky.
The Public Service Commission will rule on LG&E’s request next week. Kentucky’s attorney general is charged with representing residential customers in PSC proceedings. They need to hear from consumers. Please visit www.louisvillecan.orgtoday for links to the PSC and OAG websites’ comment forms.
Sarah Lynn Cunningham is director of the Louisville Climate Action Network, which consists of 28 businesses, community groups, religious organizations and educational institutions — including Kentucky Interfaith Power & Light — plus hundreds of individual Kentuckians. KIPL, whose director is Tim Darst, is a collection of individuals and faith communities from diverse traditions who believe that we have a personal responsibility to care for the planet and its people.
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