Thu November 8, 2012
LG&E Cost Savings Means Rates Won't Rise As Much As Predicted
Louisville Gas and Electric says it doesn’t expect customer bills to increase as much as the company predicted last year.
When Louisville Gas and Electric pitched their plan to control emissions at its Mill Creek and Trimble County power plants, officials estimated it would raise residential customers’ bills by more than 18 percent by 2016. But now, the company says it’s saved more than $500 million on the new equipment and the actual rate increase will only be about 13 percent by 2016.
LG&E spokeswoman Chris Whelan says the company’s ability to start shopping early is the main reason for the savings.
“Basically because we had the opportunity to get out in the market and do the bids early, we were able to save money,” she said. “The other companies really haven’t started their environmental upgrades, so by being one of the first utilities out in the country allowed us a better opportunity to negotiate these new contracts.”
Whelan says the company is saving some on maintenance and operating costs, but costs were reduced most drastically on equipment.
LG&E is installing the environmental upgrades to comply with upcoming federal regulations. The company’s project to retire the coal-fired Cane Run power plant and replace its capacity with natural gas isn’t included in this rate increase.