News Summary
Kentucky American Water has proposed a substantial rate increase of $9 for average residential customers to generate funds for critical infrastructure enhancements. The company plans to invest over $212 million to replace aging water pipes and improve service quality for more than 527,000 customers. The proposal is under review by the Kentucky Public Service Commission, with expected intervention from local government and the Attorney General to protect consumer interests amidst rising living costs.
Lexington, Kentucky
Kentucky American Water has submitted a proposal to the Kentucky Public Service Commission (PSC) for a significant rate increase, which would result in an additional monthly charge of $9 for the average residential customer. This increase is based on an estimated water usage of 3,900 gallons per month and aims to generate approximately $26.9 million in revenue to support vital infrastructure upgrades.
The planned upgrades are extensive, with the company earmarking more than $212 million for necessary improvements. These include the replacement of 30 miles of aging water pipes, as well as enhancements to storage tanks, pumping stations, hydrants, and meters. Kentucky American Water currently serves over 527,000 customers across 13 counties, including Fayette and its surrounding areas, making the proposed changes critical for maintaining service quality and reliability.
Rob Burton, the president of Kentucky American Water, has reiterated the company’s commitment to ensuring customer health and safety while providing high-quality water services. The PSC is expected to review this rate increase request, a process that typically spans about 10 months before arriving at a decision. Should the PSC approve the increase, the new rates may take effect on an interim basis in approximately seven months.
Interventions and Consumer Protection
In anticipation of the rate increase, the Kentucky Attorney General and the Lexington-Fayette Urban County Government have expressed intentions to intervene on behalf of the ratepayers. Lexington officials, including the city’s spokeswoman, emphasized their commitment to advocate for residents in an effort to keep living costs manageable amidst rising utility charges. The involvement of these parties is common in cases where utility companies propose significant rate increases, as they may challenge the size and justification of the requests.
Should the PSC ultimately set a rate lower than what Kentucky American Water has requested, customers could receive refunds for the difference. This adds an additional layer of scrutiny to the proposed increase as discussions unfold.
Previous Rate Increase
This is not the first time Kentucky American Water has applied for a rate increase. The last request occurred in June 2023, highlighting the ongoing need for investment in water infrastructure, as aging systems require attention and modernization to serve the growing customer base effectively.
Communication of Changes
Once the PSC makes a decision regarding the proposed rate hike, customers will be officially notified. Kentucky American Water plans to communicate any new rates through direct mailings and updates on the company’s website to ensure transparency and awareness among the user community.
Kentucky American Water is a subsidiary of American Water, the largest regulated water utility in the United States, serving over 14 million people nationwide. The commitment to infrastructure investment is part of a broader strategy to maintain and improve utility services in the wake of increasing demand and the need for modernization in water service delivery.
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Additional Resources
- Kentucky.com: Kentucky American Water Rate Increase Proposal
- Wikipedia: Kentucky American Water
- Lane Report: Kentucky American Water Seeks Rate Increase
- Google Search: Kentucky American Water
- WKYT: Kentucky American Water Requests Rate Increase
- Google Scholar: Kentucky American Water Rate Increase
- MSN: Kentucky American Water Rate Increase Filed
- Encyclopedia Britannica: Water Utilities
- GuruFocus: Kentucky American Water Investment Rate Request
- Google News: Kentucky American Water
