Conway seeks to dismiss KU and LG&E rate increase cases

June 02, 2010 | | Comments 20

Attorney General Jack Conway

FRANKFORT — Attorney General Jack Conway is asking the state Public Service Commission to dismiss rate increase requests from Kentucky Utilities and Louisville Gas and Electric because they are being sold.

“If these utilities are being sold, the new company that will be collecting these bills and reaping the benefits of the rate increases should have to make its case to the PSC – not a company that has a ‘For Sale’ sign in the yard,” Conway said Wednesday at a news conference in his Capitol office.

KU and LG&E have requested from the state Public Service Commission a $250 million increase, effective July 31. Conway said the request would represent the largest combined rate increase in Kentucky history.

Kentucky’s largest providers of electricity and natural gas are seeking the increases to recoup investments in a power plant in Trimble County and significant costs incurred by ice and wind storms.

For KU, the increase would raise electric rates by 11.5 percent, or $136 million, overall. The utility provides power to more than 500,000 homes, farms and businesses in Fayette County and 76 other counties in Kentucky and five in Virginia.

The utility would raise residential rates 13.7 percent. The average residential customer, seen as one using 1,230 kilowatt hours a month, would see bills rise $11.85 a month.

Conway, who serves as the ratepayers’ advocate in utility rate cases, said the requests by KU and LG&E are inflated.

The PSC, which rules on rate increase requests from utilities, is to hold a hearing on the LG&E and KU rate requests June 8.

On May 27, E.ON U.S., the parent company of LG&E and KU, filed notice with the state that it intended to sell the utilities to Pennsylvania Power and Light.

The PSC must approve the sale. It has 120 calendar days from the date of the filing to rule on any change of control.

Conway said the state never has considered a utility rate increase at the same time a company is requesting a change of control.

“I am concerned that E.ON, by requesting these rate increases, is trying to raise its credit profile, reduce its debt and overall make it a more attractive company to Wall Street and buyers,” Conway said.

“This kind of thing makes consumers irate. It’s just not right.”

E.ON U.S. spokesman Brian Phillips said E.ON plans to respond to the state Public Service Commission by Friday.

“Merger and the request to increase electric and natural gas base rates are two separate and distinct processes that are completely unrelated,” he said. “Regardless of who our parent is, we must continue to invest to serve our customers, and that’s what a rate case allows us to do.”

Phillips said E.ON is investing in the Trimble County power plant “to serve increasing electric demand.

“We continue to invest to enhance reliability on our natural gas and electric operations, and we’ve invested to restore service after two historic weather events.”

Conway is the Democratic nominee for U.S. Senate in this fall’s general election against Republican Rand Paul.

Conway said his action in the rate case has nothing to do with his U.S. Senate race. He said he will not take campaign contributions from utility executives and lobbyists while they have any case before the PSC, although he has previously accepted donations from people associated with KU and LG&E.

During this spring’s Democratic primary election for the U.S. Senate, Lt. Gov. Daniel Mongiardo alleged that campaign contributions by utility interests influenced rate hike approvals by Conway.

The Mongiardo campaign estimated that Conway’s campaign took in nearly $60,000 in campaign cash from utility executives and lobbyists last year, while approving a $22 million gas rate hike for LG&E.

Documents in the attorney general’s office show that Conway negotiated the rate increase on Jan. 7, 2009.

He announced his bid for U.S. Senate a few months later on April 9.

Mongiardo said Wednesday he did not see any need to return the contributions.

–Jack Brammer

Filed Under: Jack ConwayRand PaulState GovernmentUS Senate Race

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  1. Eric says:

    Hey look, a Jack Conway story. Apparently he does still exist.

  2. fedup2here says:

    It’s funny how after doing nothing as State Attorney General all those years, when election time rolls around and he is behind in the polls he suddenly acts like he cares about the people and takes a stand on something!! To bad election year doesn’t happen on a monthly basis, if it did we might actually have some pretty effective politicians in office!!!!!

  3. Don says:

    Oh Jack! This is about as dumb as the rumor I heard that the Rural Democrat guy, Will Shackelford, is running for Secretary of State! Actually he may win that useless race.

  4. kevins says:

    I don’t really care if this is for political gain. The longer I can keep my money in my pocket the better. Conway’s remark “I am concerned that E.ON, by requesting these rate increases, is trying to raise its credit profile, reduce its debt and overall make it a more attractive company to Wall Street and buyers,” is dead on. KU is playing around to make bigger profits at our expense. Once they ask and receive an increase, the RECCs won’t be far behind.

  5. diamondbill says:

    Rate payers should thank Daniel Mongiardo for this….

  6. Matt says:

    Is the cost of making electrity going up? Seems the PSC would know better than someone that’s been doing nothing but campaigning.

  7. Wills says:

    Good Job, Conway!!

  8. Monty says:

    Nothing but smoke and mirrors. The amount of wealth being transferred to Conway from LGE/KU is staggering. Just run a quick campaign contribution search with the executives of LGE.

  9. Whatda says:

    Wait. What? I thought that he said that Mongiardo was making up stories about him having something to do with rates. What is it General Conway? You need to talk straight I truly do not want Rand Paul as our next Senator.

  10. Skip says:

    Good Job, Jack.

    In the Rand Paul Utopia $merica (intentional), these companies would be allowed to rape Kenutckians at the pocketbook as often as it pleased them.

  11. theGhostPony says:

    Sounds like a good idea to me. Regardless of his perceived motives here, you can’t deny that people will save money just when they need it the most.

  12. leftbrain says:

    Conway has a point. The purchase price will be hitgher if the rate increases go through. why shuld the consumer pay that and let them get some easy porfit .. Let the purchaser ask for a rate hike later.

  13. BG says:

    Uh oh. Someone got caught with his hand in the cookie jar and now he’s hoping the electorate is stupid. Jack Conway has also taken money from a political idol Charlie Rangel, Goldman Sachs and BP. Hmmmmmmm

  14. HPK says:

    Typical politician. Conway was for the hike before he was against it. Don’t send another dirt bag lawyer to DC to rubber stamp the Obama agenda.

  15. Kel says:

    Looks like Wall Street loves Conway. Too bad for Jack that Main Street knows he is just another sleaze career politician. Go Rand!

  16. Ned says:

    Rand Paul probably has probably received many more corporate donations than Jack Conway. Heck, Rand Paul is a corporation’s wet dream. Don’t pretend like Rand Paul is a saint who only raisies campaign money by selling lemonade on the side of the road.

  17. leftbrain says:

    Hey Ned, Your man Conway is nothing more than a democratic hack ! He may be a better selection thanb Paul but don’t get your shorts in a knot over him! You , sir, need to grow up and get a thinking brain .
    They both have good and bad points but Conway’s take on immigration is considered totally wrong with the majority of citizens. It makes no sense in today’s age.

  18. Loving Life says:

    Jack Conway reminds me of John Edwards. They both have that smarmy Clairol Boy look.

  19. BG says:

    Actually Ned, Paul gets most his donations from individuals average about $50-$100. Jack Conway is very much in a lead for corporations and PACs.

  20. pat says:

    Actually BG, 77% of Paul’s donations come from people who do not live nor vote in KY.

    That $9600 from Moon Bay CA is from an internet porn site Click on it to see if this represents KY values.

    Conway has a record of cutting budgets. He cut his department’s budget by 26%. He has deficit cutting proposals of nearly half a trillion dollars. The only thing Paul cuts is corneas. He should just stick to that.

    Show me the budget, Paul.