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CUSTOMER REPRESENTATIVES AND LOUISVILLE GAS AND ELECTRIC COMPANY ANNOUNCE INNOVATIVE ENERGY-USE AGREEMENT

 LOUISVILLE, Ky., April 22 /PRNewswire/ -- Kentucky Attorney General Chris Gorman, Jefferson County Attorney Mike Conliffe, representatives of local customer-interest groups and Louisville Gas and Electric Company (LG&E) yesterday filed with the Public Service Commission of Kentucky their jointly developed comprehensive, three-year energy- conservation agreement benefitting LG&E's residential, commercial and industrial customers.
 This agreement provides incentives and conservation programs to assist customers in better controlling and reducing their energy consumption, thereby reducing their costs. Such programs will mitigate the company's need to build additional facilities to provide gas and electric service to customers. LG&E is initially committing up to $3.3 million to fund specific energy efficiency programs over the term of the agreement.
 This agreement is significant in several key respects. It results from an unprecedented partnership among government representatives, customer-interest advocates and LG&E. The parties have also agreed on an appropriate way for LG&E to recover the costs of implementing these programs while providing it with incentives to aggressively pursue energy efficiency programs. One way to recover costs is to remove the link between revenues and sales for residential customers. This new and innovative technique, commonly referred to as decoupling, will be used for the first time in the Midwest. And LG&E will be the first electric or gas utility in Kentucky to embark on a continuing process of collaborating with elected government officials and customer representatives in designing, implementing and reviewing energy efficiency programs to meet customer needs.
 In addition to the Kentucky Attorney General's office and the Jefferson County Attorney's office, the parties responsible for developing and monitoring the agreement are the Louisville and Jefferson County Community Action Agency; People Organized and Working for Energy Reform (POWER); the Metro Human Needs Alliance; the Louisville Resource Conservation Council; the Kentucky Industrial Utility Customers; and LG&E.
 Since last fall, members of all these groups engaged in a collaborative process to develop the mutually beneficial energy efficiency program.
 Specific programs are targeted to address the distinct needs of low- income residential customers. LG&E will spend about $1 million annually for home-weatherization materials and energy-usage education efforts coordinated by Project Warm. These initial programs will include an innovative rate to encourage qualifying low-income customers to conserve electric energy.
 Energy utilization audits -- similar to those LG&E currently provides to residential customers -- will be made available under the agreement to commercial customers. The alliance creating the agreement intends to explore additional programs for commercial customers. Participation in DSM programs will be optional for LG&E's large industrial customers.
 The collaborative group will be responsible for developing and approving additional DSM programs for implementation. After three years, the signatories to this agreement will submit an evaluation of the programs to the Public Service Commission.
 DSM AGREEMENT FACT SHEET
 Demand-Side Management (DSM) involves efforts to control energy usage by LG&E's customers -- residential, commercial and industrial -- that in turn reduce their bills and reduce LG&E's costs. These efforts include energy conservation, load management and innovative rate schedules.
 The agreement extends three years from the date the Public Service Commission of Kentucky approves it.
 During the term of the agreement, the parties to the agreement will evaluate the design, monitoring, implementation and performance of energy efficiency programs. They will review and approve changes to existing programs and evaluate the potential for implementing programs.
 The parties have agreed that LG&E can recover its costs for pursuing these energy efficiency programs. One of the mechanisms by which LG&E will recover its costs is by removing the link between revenues and sales for residential customers. This mechanism is often referred to as decoupling.
 Over a 3-year period, LG&E will provide up to $3 million to weatherize approximately 1,500 houses and educate customers about more efficient energy use. Project Warm will coordinate a home-energy management education program as well as a weatherization program, which will include attic insulation, water-heater insulation, energy-saving showerhead(s) and caulking as needed for those designated homes.
 LG&E will put in place, on a test basis, a low income conservation rate for approximately 10,000 customers who receive assistance from the Low Income Home Energy Assistance Program (LIHEAP). To be eligible, customers must not be currently receiving Section 8 housing assistance nor live in public housing. These eligible customers also must agree to participate in a conservation and energy education program to make better use of the energy service(s) they receive.
 LG&E will commit up to $100,000 a year for an initial energy-audit program for commercial customers. Such energy audits are now available for residential customers.
 LG&E and its shareholders will receive part of the savings resulting from the implementation of these demand-side management programs.
 To enhance their competitive ability, many of LG&E's large industrial customers already have invested in their own energy efficiency and conservation programs. As a result, their participation in programs under this agreement is optional.
 -O- 4/22/93
 /CONTACT: Jim Galloway, Metro Human Needs Alliance, 502-585-3556, or Kathy Campbell, Louisville Gas and Electric Company, 502-627-2505/
 (LGE)


CO: Louisville Gas & Electric Company ST: Kentucky IN: UTI SU: JVN

CM -- CH006 -- 9480 04/22/93 12:54 EDT
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Date:Apr 22, 1993
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