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Kentucky Resources Council, PO Box 1070, Frankfort, KY 40602 Phone [502] 875-2428

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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

PSC Approves PPL Acquisition of LG&E and KU; Settlement Offers Additional Help for Low- and Fixed-Income Ratepayers  Posted: October 4, 2010

Metro Housing Coalition Issues And Their Resolution

Of the 11 issues raised by MHC, PPL offered to undertake activities responding to 9 of them.

In addition to the issues presented by the Metropolitan Housing Coalition and other intervenors, the Attorney General's Office of Rate Intervention secured a commitment from PPL that they rates would not be increased until at least January 2013.

Below are the issues raised, followed by the manner in which the settlement agreement addresses the issues presented by the Metropolitan Housing Coalition:

1. Loosen restrictions on the emergency fund portion of the ASAP program that is run by Affordable Energy in order to allow them to use up to 10% of the annual funds for emergencies, with unused emergency funds rolling over.

2. Relax the 10% cap on administrative costs for that program. (The administrative component for the green energy program, by contract, is 25%, and for U of L is 49%!)

In the Settlement Agreement, PPL agreed to review the restrictions on both the administrative costs and emergency fund portion of the ASAP program.

3. Continue the 15-cent meter charge for funding HEA programs and possibly increase it to .25 in order to allow expanded service to low-income customers.

In the Settlement Agreement, PPL committed to continue the 15-cent-per-meter charge for funding the Home Energy Assistance Program for an additional 3-year term (until September 30, 2015).

4. A commitment that no costs of the nuclear power from the Susquehanna plant will be shifted to Kentucky ratepayers.

In the Settlement Agreement, PPL committed that no costs of the nuclear power of the Susquehanna plant will be shifted to Kentucky ratepayers.

5. A commitment to developing a committee to oversee how DSM funds are spent.

In the Settlement Agreement, PPL committed to review current and potential policies concerning low-income customers and to hold a series of meetings with representatives of low-income advocacy groups in both service areas, including MHC and other low-income advocacy intervenors, and to alternate the Customer Commitments Advisory Forum meetings and to solicit input from consumer advocacy groups on agenda items.

6. Commitment to do a cost-benefit analysis of the proposed Energy Education Center.

In the Settlement Agreement, PPL committed to do a cost-benefit analysis on the proposed Energy Education Center.

7. A commitment to revise the We Care program to better integrate it with city and Community Action Partnership programs in order to reduce inefficiencies.

In the Settlement Agreement, PPL committed to review the WeCare program for further improvements in integrating it better with city, community action and other weatherization programs.

8. Development of a better way of predicting EMPP in order to avoid high “true up” bills.

In the Settlement Agreement, PPL committed to reviewing best practices in estimating Budget Payment Plan payments to avoid high “true-up” bills, and further agreed to solicit input from low-income advocacy groups, including the Intervenors, within six months.

9. A commitment to honor all agreements made by KU and LGE in the stipulations filed in and approved by the PSC in the recent rate cases, including those commitments made with respect to low-income energy assistance, late fees and billing.

PPL committed to do so, and in addition, extended by two additional years the commitments made by LGE and KU in those rate cases to support the ACM/Metro Match, Wintercare and HEA programs.

Finally, while not an issue raised by the Metropolitan Housing Coalition, KRC has long been an opponent of "deregulation" or "unbundling" of utility generation, transmission and distribution and the elimination of regulatory controls on pricing and delivery of service. While PPL operates in a deregulated utility environment in Pennsylvania, questioning by Commission Staff revealed that PPL desires the Kentucky utilities to remain under a regulated environment because it is much less volatile than the utility environment in Pennsylvania. KRC appreciates the exploration of these and other issues by the Commission Staff. KRC also appreciates the willingness of LGE/KU and PPL to make many of the commitments sought by MHC and other Intervenors.

A complete copy of the settlement agreement is attached to the Testimony of Lonnie Bellar and can be read by going to http://www.psc.ky.gov/PSCSCF/2010%20cases/2010-00204/20100907_Joint_Motion.PDF

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