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Kentucky’s utility regulator has granted the state’s largest electric utility an increase in its rates, though the increase was less than what the utility had requested.
Investor-owned Louisville Gas and Electric and Kentucky Utilities had asked the Kentucky Public Service Commission (PSC) last year for an increase in rates for electricity and gas service, citing a need to receive adequate profits and to cover hundreds of millions of dollars of electric transmission upgrades and storm repair costs.
The commission, which regulates the rates and services of more than 1,100 utilities, in a decision this week significantly cut the utility’s requested rate increase, according to a press release from the regulator:
- The average residential electricity customer for Louisville Gas & Electric would have seen an increase in costs of 8.3% under the utility’s request. The commission granted an increase of 4.73%. That would mean an approximate increase of $5.14 a month.
- The average residential electricity customer for Kentucky Utilities would have seen an increase in costs of 11.5% under the original request. The commission granted an increase of 6.54%. That would mean an approximate increase of $8.73 per month.
- The average residential gas customer for Louisville Gas & Electric would have seen an increase in costs of 14% under the original request. The commission granted an increase of 11.09%. That would mean an approximate increase of $8.27 per month.
Liz Pratt, an LG&E and KU spokesperson, in an emailed statement said the commission’s order is extensive and differs in “several important respects from the settlement agreement filed by the parties.”
“We are reviewing the decisions in detail to understand their full implications for our operations, customers and future investments in Kentucky. We remain committed to serving our customers and engaging constructively with stakeholders, and we’ll provide additional perspective after our review is complete,” Pratt said.
The rate increases the commission approved differed slightly from those proposed in a settlement agreement between the utility and various parties that had intervened in the PSC case.
The settlement agreement proposed to the commission covered a number of topics beyond the amount of the rate increase and was signed by Attorney General Russell Coleman, the local governments for Louisville and Lexington, the U.S. Department of Defense, Kentucky Industrial Utility Customers, the Sierra Club and Kroger.
Elisa Owen, a senior organizer with the Sierra Club based in Louisville, in a statement said the organization appreciated the regulator “took steps to minimize the damage here and ensure the public’s concerns were heard.”
“Kentucky families want to be able to put food on the table and heat their homes at a reasonable cost. That’s not too much to ask,” Owen said.
Owen also criticized moves by the utility to extend the life of its coal-fired power generation, saying in her statement that “Kentuckians demand better.”
The Kentucky Broadband and Cable Association, the Kentucky Solar Energy Industries Association and a coalition of consumer advocacy and environmental groups chose not to join the proposed settlement agreement. The coalition — which includes the Berea-based Mountain Association, the Louisville-based Metropolitan Housing Coalition, Kentucky Solar Energy Society and Kentuckians For The Commonwealth — in an emailed statement applauded the commission “for setting rates much lower” than what LG&E and KU had requested.
The utility had started charging the original higher rates while its request was pending, and the regulator ordered LG&E and KU to refund customers their excess payments.
Catherine Clement, a member of the nonprofit Kentuckians For The Commonwealth, which supports policies and action for working-class families, in a statement said LG&E and KU seemed to forget “that the reason they are granted a monopoly is so that they can provide a reliable public service that is accessible to all customers, regardless of income.”
She said the utility’s customers “are completely without choice: we cannot safely choose to go without electricity; we cannot choose who provides our service; we cannot choose a cheaper provider. We are glad the PSC is more properly weighing the public interest over the interests of shareholders.”
The coalition of groups praised the commission’s decision to boost compensation to owners of rooftop solar installations for the electricity they produce. The groups said other aspects of the commission’s order — such as new regulations for handling the electricity load from power-intensive data centers — “will take time to evaluate.”
“It is clear that the Commission grappled with these issues much as we did, though,” said Byron Gary, a Kentucky Resources Council attorney who represented the groups, in a statement.
This article appears in Feb 14-28, 2026.