FRANKFORT, Ky., Oct. 4, 2000 (Lexington Herald-Leader)— Kentucky-American Water Co. wants a 12.56 percent rate increase for its more than 94,000 residential customers in Central Kentucky, which would add $2.85 to the average monthly bill.
The company also wants to charge customers a $500 "tap fee" when it installs water service to a new home.
The Public Service Commission yesterday began two days of hearings on the request.
Kentucky-American serves customers mostly in Fayette County but also in Scott, Woodford, Harrison, Clark and Bourbon counties. It also sells water to utilities in Midway and North Middletown.
Kentucky-American President Roy Mundy II has previously said the proposed rate increase is needed to maintain water quality, to increase profits from 11 percent to 12 percent and to recoup $6 million the company spent on a now-defunct pipeline from Louisville to Lexington.
A group opposed to the pipeline has joined the rate case this week to try to prevent the utility from recovering any costs associated with the failed project.
Other opponents of the rate increase are the Lexington-Fayette Urban County Government, the attorney general's utility rate intervention office and the Community Action Council of Lexington.
The company asked for the rate increase in April and can impose its requested rates in November. The commission must make its decision by February. Any interim rate increase can be adjusted or ordered refunded by the commission.
The average monthly bill for a Kentucky-American customer would go from $18.43 currently to $21.28 if the entire rate increase is approved.
Kentucky-American asked the PSC for a 7 percent increase in 1997, but received a 3 percent increase.
©2000, Kentucky Connect and the Lexington Herald-Leader
