Duke Energy Kentucky to Seek Electric Rate Increase
CINCINNATI – Duke Energy Kentucky today took the next step in seeking its first increase in base rates for electric service in 14 years, complying with a 2003 directive from Kentucky regulators to file a rate application during 2006.
The company filed an application with the Kentucky Public Service Commission (KPSC) seeking a proposed increase of $67 million, or approximately 28 percent, in annual revenues to take effect in January 2007. It filed notice of the application with the KPSC on April 27, 2006. Its last base rate increase took effect in June 1992.
Duke Energy Kentucky’s electric rates for residential customers are lower today than they were in June 1992. Under the application, a typical residential customer using 1,000 kilowatt-hours a month would see the bill rise from $65.88 per month to $85.36 per month. Even with this increase, the rates will remain well below the national average. The recent $1.3 million annual rate credit to share cost savings from the merger with Duke Energy will continue to be in effect after the application, resulting in costs to customers that are lower than they otherwise would have been without the merger.
The key reasons for the increase request are the company’s higher investments to provide an adequate electric supply and a reliable electric delivery system. In addition, the costs of coal, natural gas and purchased power have increased significantly since the company’s fuel rate was frozen in 2001.
“Since our last base rate increase in 1992, Duke Energy Kentucky has invested more than $170 million in the reliability of the electric delivery system,” said Sandra Meyer, president of Duke Energy Kentucky. “We also now own electric generating capacity dedicated to the needs of our Northern Kentucky customers and have agreed to share profits from off-system sales when that capacity is not fully utilized.”
Duke Energy Kentucky recently acquired approximately 1,100 megawatts of generating capacity to provide an adequate supply of electricity for Northern Kentucky customers. The generating capacity, totaling approximately $400 million, was acquired from Duke Energy Ohio, which had been supplying electricity to Northern Kentucky for many years under a wholesale power supply contract.
The acquisition of generating capacity was approved by the KPSC, which had ordered Duke Energy Kentucky in 2001 to conduct a long-term supply study because of the commission’s concern about the volatility in the electric wholesale market. Included in the acquisition were East Bend Station, Woodsdale Station and Miami Fort Station Unit 6.
Duke Energy is a diversified energy company with a portfolio of natural gas and electric businesses, both regulated and unregulated, and an affiliated real estate company. Duke Energy supplies, delivers and processes energy for customers in the Americas. Duke Energy’s Northern Kentucky operations deliver safe, reliable and competitively priced electricity to more than 132,000 electric customers and natural gas service to 94,000 customers. A diverse fuel mix of nuclear, coal-fired, hydroelectric and combustion-turbine generation provides approximately 28,000 megawatts of total company generating capacity. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: http://www.duke-energy.com.