Duke Energy Kentucky Reaches Settlement with the Kentucky Attorney General December 7, 2009
Duke Energy Kentucky announced today it has reached a settlement agreement with the Commonwealth’s Attorney General in its natural gas rate case.
Under the agreement, Duke Energy is asking the Kentucky Public Service Commission to approve the negotiated rate increase for natural gas delivery service of approximately $13 million, or 10.4 percent on total gas revenues, to be effective in early 2010. The original request was for $17.5 million, or a 14 percent increase.
For an average residential customer using 70 ccf (ccf is 100 cubic feet, the standard unit of measure) of natural gas per month, a typical bill of $82.21will increase by $11.52 per month to $93.73.
Since its last natural gas delivery rate case implemented in 2006, Duke Energy Kentucky has invested more than $60 million to continue the accelerated gas main replacement program (AMRP), which has been a major reliability and safety initiative for the company’s gas operations. The rate change would allow the company to begin to recover its costs for this additional investment.
The 10-year AMRP program began in 2000 with the goal of replacing 209 miles of high-maintenance cast iron and bare steel gas mains and services with low-maintenance polyethylene pipe. Benefits of the AMRP include increased customer safety and system reliability, higher system operating pressure, lower line losses, and stable operation and maintenance expenses.
Through 2008, 172 miles of main have been replaced in Kentucky. The program is 82 percent complete and scheduled for completion in 2010.
One key safety metric of the AMRP’s success is the reduced leak rate for the gas distribution system.
- The number of leaks repaired has decreased 29% from 2002 to 2008.
- The severity of leaks reported has been reduced.
- From 2006 to 2008, main repairs have been reduced by 41 percent.
- The reduction in leaks repaired has saved customers approximately $3.8 million dollars in maintenance expenses from 2001 to 2008.
“Duke Energy Kentucky is pleased with this settlement. We will continue to invest in our system to improve reliability and safety for our customers,” said Julie Janson, president of Duke Energy Kentucky. “In the four-plus years since the last rate case, the company’s operating and maintenance expenses have remained basically flat, but Duke’s investment in infrastructure has left the company well short of recovering its costs of providing service to Kentucky customers.”
The residential customer charge will increase from the current $12 per month to $16 per month to partially cover fixed expenses incurred by Duke Energy to deliver natural gas to residential customers’ property.
“Because the cost of natural gas still comprises the largest part of a bill, customers may have lower bills this heating season because of the drop in natural gas prices. Regardless, conservation remains the best way to affect the cost of heating your home,” Janson said.
Duke Energy Kentucky recognizes the impact of higher utility costs on its customers and offers energy efficiency programs, bill management assistance and energy usage information for both residential and non-residential customers on its web site, http://www.duke-energy.com/.
Duke Energy Kentucky’s operations provide natural gas service to approximately 95,000 customers in Northern Kentucky. The company also provides approximately 1,100 megawatts of electricity capacity to approximately 135,000 customers.
Duke Energy is the third largest electric power holding company in the United States, based on kilowatt-hour sales. Its regulated utility operations serve approximately 4 million customers located in five states – North Carolina, South Carolina, Indiana, Ohio and Kentucky -- representing a population of approximately 11 million people. Duke Energy’s commercial power and international business segments operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.
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/.