Beshear: Settlement Passes LG&E, KU’s $176 Million Benefit from Reduced Federal Tax Rate to Kentuckians

Andy Beshear

Attorney General Andy Beshear is calling on the Public Service Commission (PSC) to quickly approve a settlement between his office and two utilities companies that directly returns millions of dollars to Kentuckians.

The settlement filed today with the PSC by Kentucky Utilities Company (KU) and Louisville Gas and Electric Company (LG&E) would allow the companies to return $176.8 million in savings from recent federal tax reform to its customers over a 13-month period. The actual amount of savings would be for a 16-month period – Jan. 1, 2018, until April 30, 2019.

“My office has worked on this agreement with the utilities to ensure that their savings from a lower corporate tax rate is immediately returned to each ratepayer,” Beshear said. “If the PSC acts quickly to protect Kentuckians, each family will see a line of credit for their energy consumption on April’s KU or LG&E utility bill.”

Federal tax reform earlier this month reduced the corporate income tax rate for utility companies from 35 percent to 21 percent. Kentuckians pay utility taxes at the state and federal level.

On Jan. 11, Beshear and a bipartisan coalition of 18 state attorneys general, state agencies and consumer advocates called on the federal government to ensure Kentuckians, not public utilities, receive the benefits of the recently reduced federal corporate tax rate.

At the state level, the PSC issued an order to public utilities in Kentucky asking them to begin tracking their savings under the lower corporate tax rates.

Beshear said his office would intervene in all upcoming state utility cases like the KU and LG&E settlement to ensure customers promptly receive the full economic benefit of the tax reduction.

Beshear’s Office of Rate Intervention serves as a watchdog for consumers in matters relating to health insurance, natural gas, water, sewer, electric and telephone rates. Under Kentucky law, the office is responsible for representing the interests of Kentucky consumers before governmental ratemaking agencies, concentrating on utility cases before PSC.

On Jan. 8, Beshear’s office recommended that the PSC reduce the current rates Duke Energy charges its Kentucky customers by $16 million.

Beshear’s recent intervention in the AEP/Kentucky Power case helped decrease monthly bills by 4 percent when the company looked for a 16 percent increase.

In 2017, Beshear announced that his Office of Rate Intervention entered into a settlement with LG&E and KU that will save Kentucky ratepayers $90 million annually – $33.2 million of that for residential customers.

Overall in 2017, Beshear’s office saved families over $96 million in increases to their utility bills.

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