Duke Energy Kentucky requests first regulatory review of its natural gas distribution rates in nine years

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  • Investments in smart, data-driven projects to enhance natural gas reliability and resiliency and give customers more control over their energy use

  • Seeks permission to increase natural gas distribution rates by approximately $10.5 million

  • $5.2 million in annual savings for customers resulting from the federal Tax Cuts and Jobs Act

CINCINNATI -- Following significant investments to make Northern Kentucky's natural gas distribution system more reliable and resilient for customers, Duke Energy Kentucky today filed a request with its state regulator, the Kentucky Public Service Commission, to review the company's natural gas distribution rates.

As part of its request, Duke Energy Kentucky seeks approval to increase its current natural gas distribution rates by approximately $10.5 million. Today's filing represents Duke Energy Kentucky's first request to change its natural gas rates in nearly a decade. The company delivers natural gas to nearly 100,000 customers in seven counties in Northern Kentucky.

"We continue to make smart investments in data-driven projects designed to improve the reliability and resiliency of our energy delivery system," said Amy Spiller, president of Duke Energy Ohio/Kentucky. "These are strategic investments in our infrastructure and our region that are providing benefits to our customers today and will continue to do so for years to come."

Impact on customers' bills lessened due to tax act savings
Duke Energy Kentucky's application also outlines its plan to provide customers about $5.2 million in annual savings as a result of the federal Tax Cuts and Jobs Act of 2017.

As a result, residential customers who use an average of 53 Ccf of natural gas per month will see a $5.78 – or 10.2 percent – increase on their monthly natural gas bills, from $56.79 to $62.57. This proposed increase, which will vary depending on the amount of natural gas a customer uses, a customer's rate type and the prevailing cost of the natural gas commodity, would have been higher without the tax act savings.

"The tax act has provided a unique benefit to our customers by offsetting some of this proposed increase," said Spiller. "And this $5.2 million is in addition to the roughly $16.5 million in annual tax savings that we're already passing along to our electric customers in Kentucky."

Multimillion-dollar investments, not operational costs, main drivers for increase
Duke Energy Kentucky has invested $200 million in a variety of capital projects across Northern Kentucky since it last asked regulators to approve a gas distribution rate increase nine years ago. And, over that time, the company's costs to operate and maintain its system have remained nearly flat.

"I commend our gas operations employees for keeping a close eye on our operation and maintenance costs and achieving many efficiency and productivity advantages in their work," said Spiller. "Because of their intentional focus, we were able to continue delivering exceptional service without having to increase our rates for many years."

The company's recent multimillion-dollar capital investments have improved the reliability and resiliency of its natural gas distribution system across Northern Kentucky. Key investments include:

  • The accelerated service line replacement program through which Duke Energy Kentucky is upgrading main-to-curb and curb-to-meter service lines with low-maintenance, high-grade plastic pipe. The company launched the program in 2016 and, as of now, will conclude its work in 2019 – ahead of schedule and under budget.
  • The new Big Bone natural gas pipeline, which began serving customers in 2017. The 12-inch natural gas pipeline spans approximately 10 miles from Walton to Big Bone, Ky., and was constructed in response to load growth and to enhance system reliability.
  • Digital metering technology that will allow Duke Energy Kentucky to better serve its natural gas customers as well as provide customers better information and insight into their natural gas usage. The new metering technology is being deployed throughout Northern Kentucky, and the project is scheduled to wrap up by the end of 2018.

Company outlines proposed weather normalization adjustment
In today's filing, Duke Energy Kentucky also asked regulators to review and approve a weather normalization adjustment to be included on customers' bills during the winter heating season of November through April. In effect, this adjustment will soften the impact of abnormal weather on the delivery portion of customers' natural gas bills.

If the weather is colder than normal, customers will receive a credit that reduces the amount of the delivery charge. Conversely, if winter temperatures are warmer than normal, customers will see a charge on their bills. Over time, a customer's bill should total the same amount as it would without the application of the weather normalization adjustment.

The proposed adjustment will provide a more even method for customers to pay for – and for Duke Energy Kentucky to recover – the costs of delivering natural gas across Northern Kentucky. Similar adjustments are already in place for customers of other natural gas distribution utilities regulated by the Kentucky Public Service Commission.

Next steps
Duke Energy Kentucky anticipates that the Kentucky Public Service Commission will soon issue a procedural schedule for the company's rate review request. The process will include opportunities for customers and other stakeholders to learn more about the company's request and provide testimony to be included in the docket. Duke Energy Kentucky expects the rate review process to last until March or April 2019.

The company's application and supporting documentation, as well as any other entries related to the case, can be found under Case No. 2018-00261 on the Kentucky Public Service Commission's website. Additional information on Duke Energy Kentucky's application can be found at duke-energy.com/Gas-KY.

Duke Energy Ohio/Kentucky
Duke Energy Ohio/Kentucky's operations provide electric service to about 850,000 residential, commercial and industrial customers in a 3,000-square-mile service area, and natural gas service to approximately 533,000 customers.

Duke Energy Ohio/Kentucky is a subsidiary of Duke Energy (NYSE: DUK).

Headquartered in Charlotte, N.C., Duke Energy is one of the largest energy holding companies in the U.S., with approximately 29,000 employees and a generating capacity of 49,500 megawatts. The company is transforming its customers' experience, modernizing its energy grid, generating cleaner energy and expanding its natural gas infrastructure to create a smarter energy future for the people and communities it serves.

The company's Electric Utilities and Infrastructure unit serves approximately 7.6 million retail electric customers in six states – North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky. Its Gas Utilities and Infrastructure unit distributes natural gas to approximately 1.6 million customers in five states – North Carolina, South Carolina, Tennessee, Ohio and Kentucky. Its Commercial Renewables unit operates a growing renewable energy portfolio across the U.S.

A Fortune 125 company, Duke Energy was named to Fortune's 2018 "World's Most Admired Companies" list and Forbes' 2018 "America's Best Employers" list.

More information about the company is available at duke-energy.com. The Duke Energy News Center includes news releases, fact sheets, photos, videos and other materials. Duke Energy's illumination features stories about people, innovations, community topics and environmental issues. Follow Duke Energy on Twitter, LinkedIn, Instagram and Facebook.

Contact: Lee Freedman
513.287.4152 | @DE_LeeF
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