Conway asks PSC to dismiss rate increase

June 2, 2010

By RONNIE ELLIS CNHI The McCreary County Record Wed Jun 02, 2010, 06:39 PM EDT

FRANKFORT — Attorney General Jack Conway is asking the Public Service Commission to dismiss a $250 million rate increase request from LG&E and Kentucky Utilities until their sale to Pennsylvania Power and Light has been completed.

Conway, who is the Democratic nominee running against Republican nominee Dr. Rand Paul for the U.S. Senate, also said he will refuse any campaign contributions from the companies while their cases are pending before the PSC.

“I’m going to be turning down any campaign contributions from these companies while they have a case pending before the commission,” Conway volunteered Wednesday while announcing he is seeking dismissal of the rate increase request.

During the primary campaign, Conway’s chief opponent Lt. Gov. Daniel Mongiardo raised questions about the ethical propriety of Conway’s accepting contributions from utility companies which had cases before the PSC and in which the Attorney General intervened on behalf of consumers.

“It’s not appropriate, it’s not right, and it’s not fair to rate payers,” for the commission to consider the request when it’s another company which will reap the revenues from the request, Conway said.

“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,” said Conway.

Instead, Conway said, PP&L should return to the PSC after the sales are complete and make its own case for the increase.

The companies are seeking approximately $250 million in higher rates to cover capital investments in a Trimble County power plant and to cover the costs of damages during last year’s wind and ice storms which wreaked havoc across much of the state. Both companies are owned by EON U.S. which is selling them to PP&L.

Conway said the rate increase is the largest anyone can recall in the state’s history and that it’s also unprecedented for the PSC to consider the request while simultaneously considering approval of the companies‚ sales. He said he will oppose the rate increase if his motion for dismissal isn’t approved.

“It’s awfully high,” Conway said of the $250 million request.

Brian Phillips, Manager of External Communications for EON U.S., said the rate increase and the change of ownership are two separate issues and one shouldn’t affect the other.

“We are currently reviewing the Attorney General’s motion and plan to respond formally to the PSC by this Friday,” Phillips said. “The merger and request to increase our base rates are two separate processes that are completely unrelated. Regardless of who is our parent (company), we must continue to invest to serve our customers and that is what a rate case allows us to do.”

The PSC is set to hear the rate increase on June 8. Andrew Melnykovych, spokesperson for the PSC, said the commission received Conway’s motion and has taken it under advisement. He said he expects the commission to rule on Conway’s motion in advance of the June 8 meeting.

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.

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