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KU FILES PLAN TO CREDIT CUSTOMERS' ELECTRIC BILLS

 LEXINGTON, Ky., March 29 /PRNewswire/ -- Kentucky Utilities Company (KU) today filed plans with regulatory agencies to disburse approximatley $44.5 million that has been held in escrow pending resolution of a coal contract dispute. The plans were filed with the Federal Energy Regulatory Commission (FERC) and the Kentucky Public Service Commission (PSC). A separate filing will be made with the State Corporation Commission of Virginia, covering KU's Virginia customers.
 The proposed plan includes these elements:
 -- crediting approximately $32.3 million to 403,000 current Kentucky
 retail customers' bills over the next year. The 12-month credit
 period was chosen as the fairest way of reflecting seasonal
 usage. For the average residential customer using 750 kilowatt
 hours per month, the total credit will be approximately $23.85.
 For the average residential customer with electric heat using
 1400 kilowatt hours per month, the total credit will be
 approximately $44.50.
 -- crediting or refunding approximately $6.1 million to the
 company's wholesale customers. Of that sum, approximately $2.3
 million will go to KU's Virginia customers.
 -- retaining approximately $2.3 million which represents fuel-cost
 savings on inter-system sales made to other utilities.
 -- retaining the balance of the escrow funds, approximately $3.8
 million, to be used to reimburse KU's shareholders for its out-
 of-pocket litigation costs. KU's complex, nine-year lawsuit with
 South East Coal Company began in 1984 and was not settled until
 February 1993.
 The PSC, FERC and Virginia regulatory agencies must independently review and approve a plant before KU can begin disbursing the funds.
 "We're pleased that customers will benefit from our nine-year effort to recover fuel cost savings for them," said John T. Newton, KU's chairman, president, and CEO.
 Newton said the key to the customer credits was KU's 1984 request to the court that disputed coal prices be deposited in a court-supervised escrow account to await a final decision in the case. The court ordered that deposits be made on a per ton basis for all deliveries from April 1985 through February 1989. The deposits, together with interest, bring the total escrow account to approximately $44.5 million.
 KU customers have already saved an additional $25 million from March 1989 through December 1990 which were reflected in reduced fuel prices. When the court ruled for KU in 1989, the deposits stopped and KU paid the court-ordered lower prices through the end of the contract. As a result, the $25 million of higher coal prices never showed up on customers' bills.
 Newton also noted that KU is asking the PSC for its approval to advertise KU's filing in Kentucky, regional and national newspapers. This will alert former retail customers of KU's proposed plan so they can contact the appropriate regulatory authority if they believe they have a claim. At least 71 percent of KU's current customers were also customers in the period covered by the deposits.
 KU's wholesale customers due credits or refunds, pending FERC approval are:
 Customer Amount
 Barbourville Electric $200,302.41
 Bardwell Electric System 22,624.96
 Berea College 278,323.75
 City Utilities Commission - Corbin 200,330.27
 City of Bardstown 262,727.10
 City of Falmouth 50,538.53
 City of Nicholasville 312,085.76
 City of Paris 103,735.57
 City of Providence 95,906.75
 Electric Plant Board of Benham 17,894.00
 Frankfort Electric & Water Plant Board 1,512,508.00
 Madisonville 732,101.62
 Old Dominion Power Company (Va.) 2,281,166.81
 Total $6,070,245.53
 KU will list the fuel portion of the credit and the interest portion of the credit on each customer's bill. KU will also prepare appropriate 1099 forms for each customer receiving an interest payment over $600.
 Kentucky Utilities, based in Lexington, is committed to serving its customers and shareholders by producing reliable, low-cost electric energy. The company provides electricity to more than 430,000 customers in 77 Kentucky counties and five counties in southwestern Virginia. KU is the principal subsidiary of KU Energy Corporation (NYSE: KU).
 Fact Sheet
 Kentucky Utilities (KU) Files Plan
 To Credit Customers' Electric Bills
 March 29, 1993
 Total savings: approximately $69.5 million
 Amount of escrow: approximately $44.5 million
 Includes deposits made on coal deliveries during litigation, and
 interest.
 (Note: KU customers also benefitted from $25 million already
 reflected in lower customer billings from 1989-1990.)
 Reason for escrow: KU and South East Coal Company had disputed the price of coal under their contract. Court allowed KU to establish escrow fund for part of the difference between what KU believed it owed and what South East Coal Company believed it was due.
 Escrow Period covered: April 1985 to March 1989
 Litigation Settled: February 1, 1993
 Proposed Plan: Submitted to Kentucky Public Service Commission, Federal Energy Regulatory Commission, and the State Corporation Commission of Virginia. The PSC, FERC and Virginia regulatory agencies must review and independently approve KU's plan before the funds can be disbursed.
 Proposed credits:
 Retail customers will have their bills reduced over a 12-month
 period. The wholesale customers will receive credits over a
 12-month period or lump sum payments.
 Apportionment:
 $44.5 Million
 in escrow Prior $25 Million
 Retail customers in Ky.: $32.3 million $19.8 million
 Wholesale customers: $ 6.1 million (includes $ 3.7 million
 Va. retail customers)
 Other utilities: $ 2.3 million $ 1.5 million
 Litigation costs: $ 3.8 million
 Wholesale customers and amounts of refunds:
 Customer Amount
 Barbourville Electric $200,302.41
 Bardwell Electric System 22,624.96
 Berea College 278,323.75
 City Utilities Commission - Corbin 200,330.27
 City of Bardstown 262,727.10
 City of Falmouth 50,538.53
 City of Nicholasville 312,085.76
 City of Paris 103,735.57
 City of Providence 95,906.75
 Electric Plant Board of Benham 17,894.00
 Frankfort Electric & Water Plant Board 1,512,508.00
 Madisonville 732,101.62
 Old Dominion Power Company (Va.) 2,281,166.81
 Total $6,070,245.53
 Reduction benefit to average residential customer:
 For the average residential customer using 750 kilowatt hours per month, the total credit will be approximately $23.85. For the average residential customer with electric heat using 1400 kilowatt hours per month, the total credit will be approximately $44.50.
 Notice to former customers:
 KU will advertise in state, regional and national newspapers advising former customers of the proposed credit plan and its filing so that, if they believe they have a claim, they can contact the appropriate regulatory agencies.
 KU has recommended to the regulatory agencies a plan to disburse the escrowed funds. The agencies will review KU's proposal to decide whether former customers have any claim to the funds.
 KU records indicate at least 71 percent of its current customers were also customers in the period covered by the deposits.
 Reason for the 12-month adjustment period:
 To most equitably recognize seasonal deviations in consumption. Spreading out the adjustment is the fairest way of reflecting seasonal usage.
 Impact of the one-year rate reduction on KU earnings:
 None. The escrow funds are made up of the disputed coal prices that were deposited with the court pending the outcome of the litigation and the interest earned on those deposits. Now that the courts have ruled in KU's favor, KU is passing on the savings to its customers.
 For More Information: Faith Miller Cole or Ed Van Hook, Corporate Communications, Kentucky Utilities Company, One Quality Street, Lexington, Kentucky 40507, 606-288-1192 or 606-288-1105.
 -0- 3/29/93
 /CONTACT: Faith Miller Cole, or Ed Van Hook, Kentucky Utilities Company, 606-255-2100/
 (KU)


CO: KU Energy Corporation; Kentucky Utilities Company ST: Kentucky IN: UTI SU:

SB-DF -- CH006 -- 0528 03/29/93 12:46 EST
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Date:Mar 29, 1993
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