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Kentucky Utilities, LG&E to reduce conservation offerings

Kentucky Utilities Co. and Louisville Gas and Electric Co. plan to reduce incentives for some conservation programs in 2018 and eliminate other programs the following year.

The PPL Corp. subsidiaries on Dec. 6 proposed to the Kentucky Public Service Commission a demand-side management and energy efficiency program plan for 2019-2025. That application proposed to continue several programs but eliminate others, a move the companies said is necessary because it has become more challenging for utility-run demand-side management and energy efficiency programs, or DSM-EE, to be cost-effective.

"Increasing customer adoption of energy-efficiency measures and declining avoided costs of energy and capacity have necessitated a substantial reduction in the companies' DSM-EE offerings," the companies said.

Kentucky Utilities and LG&E said the reductions are reflected in their application and in a routine annual budget filing made Nov. 29 for the upcoming 2018 DSM-EE, program year. That filing has reductions and alterations to existing DSM-EE incentives, including a decision to stop issuing energy profiles under its smart energy profile program as of April 1, 2018.

"Although these programs were approved in their current form through the end of 2018, the companies determined that it was prudent to change the incentive related to these programs early due to changed circumstances and reduced cost-effectiveness," the companies said in their application for the DSM-EE plan to start in 2019.

In that plan, Kentucky Utilities and LG&E proposed to continue several programs, including a low-income weatherization program known as WeCare, another that helps schools fund energy management programs, and demand conservation offers available to residential and nonresidential customers.

Kentucky Utilities and LG&E said they would allow other programs to expire since they will have reached the end of their approval cycle and useful life by the end of 2018. These include a program that provides an onsite energy audit and report with energy saving improvement recommendations. Under that program, customers who achieve efficiency through the improvements are eligible for incentives to partially offset the cost of the improvements.

The companies projected a total DSM-EE portfolio cost of $98.25 million over seven years starting in 2019.

Kentucky Utilities and LG&E said customers would pay less than they do now for the programs. Under the new plan, the companies projected the monthly bill impact of the new DSM-EE programs and revisions will be $1.47 for an LG&E residential electric customer with average usage of 957 kWh/month and $1.23 for a Kentucky Utilities residential electric customer with average usage of 1,179 kWh per month.

Those same customers now pay $3.31 and $3.42, respectively.

The monthly gas bill impact of the new DSM-EE programs and program enhancements will be five cents for LG&E residential gas customers with average usage of 55 ccf per month, the companies said. The same customer now sees a DSM-EE charge of $1.03. (Kentucky PSC Case No. 2017-00441)