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PPL's Ky. utilities protest rate cut decision

Kentucky Utilities Co. and Louisville Gas and Electric Co. want the Kentucky Public Service Commission to reconsider a recent order that set a total annual revenue decrease of $203.8 million to reflect changes in federal income tax rates.

The commission on March 20 modified a January 2018 settlement between the PPL Corp. subsidiaries, Kentucky Industrial Utility Customers Inc. and the Kentucky Office of Attorney General. The settlement originally proposed a total revenue decrease of $176.9 million, but the rate reduction approved by the commission is $26.9 million higher.

In a petition filed March 26, Kentucky Utilities and Louisville Gas and Electric, or LG&E, asked the commission to reconsider the order, arguing in part that they did not get a chance to address concerns with the settlement prior to the commission's decision.

The companies said commission staff issued two requests for information to them. Neither request questioned the use of estimated capitalization and cost of debt consistent with the terms of the so-called "surcredit" issued under the federal tax overhaul in the companies' calculation, Kentucky Utilities and LG&E said. The commission also did not hold a hearing on the matter, the companies added.

"The companies were given no opportunity to confront and address the commission's concern," the petition said. "Because they were given neither notice nor an opportunity to be heard, the companies were denied due process."

Kentucky Utilities and LG&E also argued that the order "violates a laundry list" of state statutes by failing to provide the companies with a hearing and sufficient notice of the rate change.

The companies want the commission to reconsider the modification to the settlement, formally recognize that the order has no force and effect and allow the companies to implement the credit at the levels proposed by the parties to the settlement.

Kentucky Utilities and LG&E also want a hearing on the order's modification to the capitalization and cost of capital used to calculate the credits.

Should the commission deny the reconsideration and hearing request, the companies asked it to formally recognize that the order has no force and effect and to hold a complete hearing on the merits of the Kentucky Industrial Utility Customers' complaint that started the case.

The companies asked that the commission issue an order on the request by March 28. (Kentucky PSC Case No. 2018-00034)