LGE_KU-Logo1Louisville Mayor Greg Fischer’s office announced Friday that the city will intervene in Louisville Gas and Electric’s case before the Kentucky Public Service Commission, where the utility company is currently seeking an 8.5 percent rate increase for residential customers.

LG&E is proposing to invest $511 million by replacing current electric meters with “smart meters,” which can digitally send readings from each location back to LG&E, as well as allow customers to better monitor and understand their energy usage. The request also calls for doubling the fixed monthly charge for residential customers to $46, while lowering the usage rate — which critics say would disproportionately impact low-income residents and discourage investments in solar panels and energy efficiency.

Fischer’s press release noted that Louisville is one of LG&E’s largest customers, and the rate increase “would affect all local residents and could potentially reduce the number of local families served by Louisville Metro’s low-income heating assistance program.”

“It’s important for Metro Government to be part of the discussion on a decision that will impact every household in our city,” stated Fischer. “This will allow us the ability to advocate for the citizens of Louisville while better understanding the needs of LG&E.”

The city will be represented in the PSC case by Jefferson County Attorney Mike O’Connell, who stated that “Louisville Metro has a special interest in this case that cannot be represented by any other party. It is important that the concerns of Louisville be heard. We will present issues and develop facts that will assist the Public Service Commission in fully considering this issue.”

Councilman Bill Hollander told IL earlier this week that he was ready to file a resolution urging the city to intervene in the case, as he believes high fixed charges disproportionately impact low-income residents and small businesses, while decreasing usage rates undermines investments in energy efficiency.

“We want to encourage people to use less energy, to do more solar, to do all kinds of things for energy efficiency, yet if we increase the fixed charge and reduce the per-usage charge, we’re going in the opposite direction, in terms of incentives,” said Hollander.

Hollander noted that the city has failed to intervene in utility rate cases before the PSC for many years, and he believes Metro Government should start doing so in all cases.

“That’s done by other communities, it’s done routinely in Lexington,” said Hollander. “This has a big impact on our citizens, so I think the government should be there at the table looking after their interests.”

Cathy Hinko, director of the Metropolitan Housing Coalition, told IL that the fixed charge of $46 for residential customers — no matter how much energy they use — is “really regressive and basically a flat tax,” while lowering usage rates is “counterproductive to alternative energy from a monopoly.” She said that while LG&E receives taxpayer dollars to invest in energy education for the public, this proposal to reconfigure their rate structure “seems like they haven’t read their own literature about incentives to lowering energy usage,” all while “placing a huge burden on low-income people.”

Hollander noted that utility companies around the country are increasingly moving toward higher fixed charges, though some local governments are resisting that trend.

Fischer’s call to intervene in the PSC case received bipartisan approval from Councilman Kevin Kramer, R-11, the chair of the Republican caucus.

“It is important for Louisville Metro to speak on behalf of our residents,” said Kramer. “While it is appropriate for LG&E to seek ways to more efficiently offer and monitor its service, these efforts should actually result in lower long-term costs for LG&E. A temporary increase in expense should not lead to a long-term increase in rates.”

LG&E told The Courier-Journal last month that relying more on fixed charges would make fluctuations in utility bills less volatile, though customers currently have a billing option to balance out their payments by a fixed monthly amount. The company says their smart meter deployment and increased revenue would lead to fewer and shorter outages.