Wednesday, May 25, 2016

PSC sets public meeting June 7 to discuss Kentucky American Water's request for rate increase

Map shows site of hearing on water rate increase
The Kentucky Public Service Commission will hold a public meeting next month in Lexington to receive public comments on rate increases requested by Kentucky-American Water Co. that include a higher cost of water sold wholesale to the City of Midway.

The public comment meeting on June 7 will be held at the Conference Center on the Bluegrass Community and Technical College's Leestown Road Campus, 164 Opportunity Way, just outside New Circle Road. It will begin at 5:30 with an information session, during which PSC staff will explain the ratemaking process and an overview of Kentucky American's application. The public comment portion of the meeting will begin at 6:30 p.m. For those unable to attend, the presentation will be available on the PSC website, psc.ky.gov, beginning June 7.

Kentucky American wants to raise its annual revenue by about 15 percent, bringing total annual revenue to about $95 million. The requested rate increase for wholesale customers, including Midway, is 6 percent plus an increase in the monthly charge based on size of the meter. Mayor Grayson Vandegrift's budget for the fiscal year beginning July 1 anticipates an overall 13 percent rate increase.

The company says its request is driven mostly by the need to recover the cost of ongoing system improvements and of major construction projects completed since the last rate adjustment in 2013, notably a new filtration system at its Richmond Road facility.

In addition to the base rate increase, Kentucky American is again asking the PSC for permission to begin adjusting retail and wholesale rates annually to cover the cost of infrastructure repairs and replacement. The annual adjustments would be subject to PSC review and approval, but through a process less extensive than that in a rate case, the PSC says in a press release. It rejected the same idea in 2013, on grounds that it would not accelerate the replacement of aging water lines.

The company's application and related documents are available on the PSC website, psc.ky.gov. The case number is 2015-00418. A narrated slideshow explaining the PSC ratemaking process is available on YouTube at https://www.youtube.com/watch?v=Ch9vTS5NzJ8.

In addition to the public meeting, the PSC will conduct a formal evidentiary hearing in the case on July 13, beginning at 10 a.m. EDT. The hearing will be held at the PSC offices at 211 Sower Blvd. in Frankfort and may last several days. It will be open to the public and may be viewed live on the PSC website. Written comments will be accepted through the conclusion of the evidentiary hearing. They may be mailed to the PSC at P.O. Box 615, Frankfort, KY 40602, faxed to 502-564-9625, e-mailed from the PSC website or submitted in person at the public meetings or at the PSC offices.

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