Frankfort, KY, October 15, 2025
News Summary
Kentucky Utilities has proposed a significant rate increase that would affect both residential and commercial customers, marking the fourth increase in a decade. If approved, residential rates may rise by approximately 40% since 2015, while small businesses could face an 86% increase in meter fees. This proposal also includes a reduction in the solar net metering rate by nearly half, which impacts solar energy users’ savings. The Public Service Commission is expected to make a decision by March 30.
Kentucky Utilities Proposes Fourth Rate Increase in Ten Years, Affecting Residential and Commercial Customers
Frankfort, KY—Kentucky Utilities (KU), in conjunction with Louisville Gas & Electric, has submitted a request for a significant rate increase to the Kentucky Public Service Commission (PSC). This proposed hike marks the fourth formal increase KU has sought in the last decade, raising concerns among residential and commercial clients about rising energy costs.
If the PSC approves the request, residential rates could see an approximate increase of 40% since 2015. Small commercial clients would not be spared from these changes either, facing a staggering 86% surge in their meter fees. In concrete terms, the Mountain Association Energy Team has predicted that the proposed increase could inflate electric bills across 218 accounts, which consist of 66 small businesses, 85 nonprofits, and 67 local governments, by nearly $306,000 annually, excluding any additional taxes and surcharges.
Among the affected local governments, one municipality is estimated to face an annual increase of over $13,000 in electricity costs, signaling the profound impact of the measure. Large commercial customers will also see significant adjustments, faced with a restructured demand charge based on peak power usage at different times of the day, which is expected to complicate billing processes further. This complexity may disproportionately affect smaller businesses that may lack the resources or expertise to modify their operations to manage these changes effectively.
Another controversial aspect of the proposed rate increase is the planned reduction of the solar net metering rate by nearly half. This alteration is especially concerning for current solar energy users, as it significantly reduces their potential savings. One specific example highlighted shows a client’s projected annual savings dropping by almost $1,600 due to this change in policy.
The Mountain Association is actively collaborating with various public interest groups to advocate for impacted clients, which include small business owners, nonprofits, local governmental entities, and homeowners. There will also be opportunities for public engagement, as comments can be submitted to the PSC regarding the proposed increase. Customers are encouraged to attend upcoming public meetings in Lexington, Middlesboro, and Frankfort to voice their opinions and concerns directly.
The PSC has a deadline of March 30 to render a final decision on this proposed rate hike. Representatives from KU have justified the request, stating that the increase stems from rising operational costs and necessary enhancements to the energy system. They assert the adjustments are essential to maintaining service quality, despite ongoing customer concerns about the financial burden these increased rates may impose.
If approved, the average residential customer can expect their monthly bills to rise by approximately $18. As the debates around this rate increase unfold, many in the affected communities are closely monitoring the developments, hoping to find a resolution that balances the need for infrastructure improvements with the financial realities they face.
FAQ Section
What is Kentucky Utilities proposing?
Kentucky Utilities is proposing a rate increase that could raise electric bills for residential and commercial customers, marking the fourth formal increase in the last ten years.
How much could residential rates increase?
If approved, residential electric rates could increase by approximately 40% since 2015.
What does the Mountain Association predict regarding the financial impact?
The Mountain Association estimates that the proposed rate increase could raise electric bills for 218 accounts, including small businesses and local governments, by nearly $306,000 per year.
How will this affect solar customers?
The proposed changes include a reduction of the solar net metering rate by nearly half, significantly decreasing potential savings for existing solar customers.
When will the PSC make a decision on the proposed rate increase?
The PSC has until March 30 to issue a final decision on the proposed rate increase.
Key Features of Proposed Rate Increase
| Feature | Details |
|---|---|
| Current Rate Increase Request | Fourth increase in ten years |
| Impact on Residential Rates | Approx. 40% increase since 2015 |
| Projected Annual Increase for Clients | Nearly $306,000 for 218 accounts |
| Solar Net Metering Rate Reduction | Down by nearly half |
| Average Monthly Bill Increase (if approved) | Approx. $18 |
| PSC Decision Deadline | March 30 |
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Additional Resources
- WKYT: Electricity Affordability Concerns
- LEX18: Utility Customers Speak Out
- WHAS11: Residents Question Rate Hike
- Kentucky.com: Opinion on Rate Increase
- WTVQ: KU and LGE Propose Rate Increases
- Wikipedia: Electricity Pricing
- Google Search: Kentucky Utilities Rate Increase
- Google Scholar: Kentucky Utilities Rate Hike
- Encyclopedia Britannica: Utility Rate Increase
- Google News: Kentucky Utilities Rate Increase
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