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Tuesday, April 30, 2019

PSC schedules public meeting Monday, formal hearing May 14, on Ky.-American Water rate hike requests

Adapted from a Public Service Commission news release

The Kentucky Public Service Commission will conduct a meeting in Lexington Monday evening, May 6, to provide information on and receive public comments about the rate increases requested by the Kentucky-American Water Co., including a 21.5% increase in wholesale water sold to Midway.

“This meeting will allow the public to learn about the PSC’s ratemaking process and Kentucky American Water’s application and to present their views directly to members of the Commission as we prepare to consider whether the proposed rates are fair, just and reasonable,” PSC Chairman Michael Schmitt said.

The meeting is scheduled for 5:30 p.m. May 6 at Bryan Station High School, 201 Eastin Road.

The formal hearing of the case, with presentation of evidence, will be held at the PSC offices at 211 Sower Blvd. in Frankfort, beginning at 9 a.m. May 14. The hearing, which may last several days, will be open to the public. Written comments will be accepted through the conclusion of the hearing. The evidentiary hearing may be viewed live on the PSC website.

Midway Mayor Grayson Vandegrift said when the rate hike was proposed in November that it was "absurd" and he planned to protest it.

Kentucky American says it needs the added revenue to recover increased operating costs, continue replacement of aging infrastructure and bolster sagging rates of return for its investors.

The company is also seeking authorization for an annual rate-adjustment mechanism that would impose a surcharge to cover the cost of infrastructure repairs and replacement. The annual adjustments, which would be a separate line item on customer bills, would be subject to PSC review and approval, but through a process less extensive than that in a rate case. In its application, Kentucky American Water says the adjustment mechanism would lead to less frequent and smaller base rate adjustments. The PSC, in a 2013 rate case, rejected the idea, saying it would not accelerate the pace at which the company is replacing aging water lines. The proposal was removed as part of a settlement agreement in the 2016 rate case that increased average residential bills by about 8.5 percent.

In August 2018 the PSC decreased Kentucky American’s rates to reflect the reduction of the federal corporate income-tax rate which took effect in January 2018.

The Kentucky American application and related documents are available on the PSC website, psc.ky.gov. The case number is 2018-00358. Written comments will be accepted at the meetings. Written comments also may be mailed to the PSC at P.O. Box 615, Frankfort KY 40602, faxed to 502-564-3460 or e-mailed from the PSC website.

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