Since June 2007, Kentucky American Water has raised its rates six times. Residents of the 14 counties in Kentucky serviced by the company, including Fayette County, are facing yet another possible increase in water rates.
The last rate increase was implemented approximately 18 months ago when KAW raised its rates by 9.2 percent for residential clients, an increase that was only about half as much as the company had proposed to the Public Service Commission in 2016. KAW’s current application to the PSC proposes to increase its total rate by 22 percent, which will produce nearly $20 million in additional revenue each year, equating to a rate increase of 24 percent (or $7.56) for residential customers and a 28 percent increase (or $45.90) for commercial customers.
The company reported that “it has spent more than $100 million on infrastructure upgrades and needs the rate increase to pay for them.”[1] According to Nick Rowe, president of Kentucky American Water, these increases are justified and enable the company to adopt a preemptive approach to the services they provide. Rowe argues that many areas around the country have not kept up with aging infrastructure and the problems that ensue from delayed maintenance, whereas Kentucky American Water “continues to make proactive investments in aging infrastructure that are necessary to provide quality, reliable water service to the customers we serve throughout the region.”[2]
Many, including the Mayor of Lexington, Jim Gray, have been critical of the previous rate increases and question the stated reasons for the ongoing increases. In a statement in the Lexington Herald Leader, Mayor Gray states, “It’s a real shame that Kentucky American Water raises rates on Lexington citizens, and then turns right around and uses that money to buy water utilities in other towns around Lexington.”[3]
The Public Service Commission will review the application and ultimately decide whether the rate increase moves forward and how much the increase will be. That process can take up to year.
[1] Musgrave, Beth. “Kentucky American Water Wants a 24 Percent Rate Increase for Residential Customers.” Kentucky, Lexington Herald Leader, 28 Nov. 2018, www.kentucky.com/news/local/counties/fayette-county/article222317380.html.
[2] Musgrave, Beth. “Kentucky American Water Wants a 24 Percent Rate Increase for Residential Customers.” Kentucky, Lexington Herald Leader, 28 Nov. 2018, www.kentucky.com/news/local/counties/fayette-county/article222317380.html.
[3] Musgrave, Beth. “Kentucky American Water Wants a 24 Percent Rate Increase for Residential Customers.” Kentucky, Lexington Herald Leader, 28 Nov. 2018, www.kentucky.com/news/local/counties/fayette-county/article222317380.html.
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