FROM THE COMMONWEALTH OF KENTUCKY OFFICE OF THE ATTORNEY GENERAL

Andy Beshear

Beshear: Victory Over Atmos Energy Saves Kentucky Families Nearly $15 Million Annually

Attorney General Andy Beshear announced today that, based on efforts by his Office of Rate Intervention, the Kentucky Public Service Commission (PSC) denied a requested rate increase and instead decreased current rates of Atmos Energy, saving Kentucky families nearly $15 million annually.

Atmos, a natural gas distribution utility, serves nearly 177,000 Kentuckians in 36 counties from Paducah to Lancaster.

Before the PSC, Beshear’s office advocated against the utility’s requested increase of $14.45 million in annual revenues that would have raised the average residential customer’s bill nearly 9 percent a month. Based on Beshear’s arguments, including that Atmos’s expenses were inflated, the PSC denied an increase and instead reduced Atmos’s current rates by $261,769.

“Our Kentucky families already struggle to afford food and medicine, and they cannot afford unreasonable and unnecessary increases to their utility bills,” said Beshear. “My office will continue to fight against utilities that insist on seeking unreasonable rate increases that benefit shareholders rather than customers.”

Beshear said his office also advocated against Atmos’s excessive increases in investments, and as part of Tuesday’s order the PSC placed a cap on the amount the utility can spend on infrastructure each year. Based on the attorney general’s arguments, the amount shareholders earn each year was reduced from its current level, rather than increased as proposed by the utility.

“Although my office understands the need for utility companies to maintain their infrastructure to provide safe and reliable service, I agree with the PSC that Atmos’s level of spending is unconscionable,” said Beshear.

Other aspects of the attorney general’s proposals adopted by the PSC are:

· A requirement that Atmos keep adequate records of lobbying efforts to ensure consumers are not paying for costs related to influencing legislation

· A smaller increase in the residential customer charge than proposed by the utility

· Denial of Atmos front-loading expenses that benefit shareholders to the detriment of customers

This was Atmos’s third rate case in four years. Based on the attorney general’s efforts and involvement in the past three cases, the results have been either rate decreases or a very small increase.

This Atmos Energy case is one of five major investor-owned rate cases in which the attorney general has intervened in on behalf of Kentucky families in the past eight months. The unprecedented number of investor-owned rate cases impacts Kentuckians in about 90 counties and could have increased annual rates by nearly $200 million. Through the attorney general’s involvement in the first four cases, Kentucky families will save more than $113 million a year.

The hearing in the fifth case, involving Kentucky-American Water, begins Monday May 13 at 9 a.m. at the PSC. The attorney general has proposed a significant reduction to Kentucky-American’s proposed revenue increase and is advocating that the PSC deny the utility’s request for an annual tracker mechanism that provides for recovery of investment between rate cases, thus resulting in constant, annual rate increases.

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 the PSC.

Under Beshear’s administration, the office has helped Kentucky consumers avoid approximately $1.6 billion in proposed utility rate increases.

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