LOUISVILLE, Ky. — Old Dominion Power Co., a subsidiary of Kentucky Utilities, announced it filed a request on Monday with the Virginia State Corporation Commission (SCC) to increase its base electric revenues approximately $6.5 million or 9.6 percent.
ODP said the rate increase is needed primarily to recover costs associated with improving service and reliability, but also cited costs associated with complying with tougher federal environmental regulations.
ODP is the name under which Kentucky Utilities operates in Virginia. ODP’s Virginia customer service area encompasses portions of five Southwest Virginia counties including nearly all of Wise County and some portions of Lee and Scott counties.
KU and its affiliated utility Louisville Gas and Electric Co. (LG&E) are “undergoing one of the largest environmental upgrades in the companies’ history,” reads a KU press release, “investing more than $1 billion to ensure they meet the increased environmental regulations.”
KU Vice President of State Regulation and Rates Ed Staton said the companies “understand that any increase impacts our customers, but we continue to invest in our system to maintain service and reliability for our customers. This rate adjustment is designed to enable us to recoup only ODP’s portion of the costs of necessary improvements we’ve already made.”
KU said some of the largest investments were to meet more stringent environmental regulations and enhance reliability. The reliability investments include upgrades to transmission systems, enhanced substation reliability and improvements to the energy management system.
To provide higher levels of customer service and meet tighter federal cyber security standards and more stringent transmission reliability requirements, KU said the combined companies have hired nearly 175 new employees.
ODP residential customers using 1,000 kilowatt hours per month are expected to see an overall increase of about $9.57 per month if the SCC approves the rate increase. Even if the increase is approved, the utility said ODP customers are still expected to have among the lowest electricity rates in Virginia and the country.
If approved, the rate increase would not go into effect until Jan. 1 of next year.