2015 Residential Rate Increase Q&A
What percentage is Kenergy asking the PSC to approve?
On Oct. 30, Kenergy will file for a 2.46 percent rate increase for the residential class.
How much will the proposed 2.46 percent cost members per month?
Kenergy’s proposed rate increase would raise the average residential bill by $3.90 a month.
Kenergy’s average residential use is 1,352 kilowatt hours per month.
When was Kenergy’s last rate hike?
Sept. 1, 2011
It was a 2.87 percent increase.
Two most recent increases – August 2013 and February 2014 – were not the result of Kenergy
requesting a higher rate. Instead, those increases were the result of two aluminum smelters
ending their wholesale power contracts with Big Rivers, which is Kenergy’s wholesale power
supplier. When the smelters left Big Rivers’ system, Big Rivers increased its wholesale rates to
recover a portion of its lost revenue.
Kenergy passed through those higher wholesale prices to members; however, they were not
Kenergy rate increases.
When would this proposed rate increase go into effect?
If the PSC approves the proposed increase, Kenergy expects it to go into effect on May 1, 2016.
Why is Kenergy seeking a rate increase?
The main driver is depreciation expense, which has gone up nearly $3 million a year since
Kenergy’s last rate case in 2011. Explanation: The cooperative has invested about $60 million in
infrastructure over the past five years. It is important to note about 40 percent of the $60
million was spent to extend service to new members.
That $60 million is not included in our current rates. We plan to recover that investment over a
30-year period.
Also, labor costs and overheads have increased 8 percent during the past five years, mainly due
to inflation.
Will this be the last rate increase for a while? Or does Kenergy plan to do this
often?
Kenergy projects a 2 to 3 percent increase every three to four years, excluding any increases
related to wholesale power rates. This has been the cooperative’s practice for many years.
What has the co-op done to control costs since the last rate increase?

Kenergy has refinanced loans to lower interest rates, which resulted in saving about $1
million annually.

Since 2011, Kenergy has asked its employees to pay a larger percentage of their healthcare premiums. This has saved the cooperative $80,000 a year.

Kenergy has reduced the amount it spends on trimming trees and limbs near power
lines, saving about $118,000 a year – without sacrificing reliability.

The co-op has replaced about 100 miles of deteriorated power lines in the past five
years. Besides improving Kenergy’s service reliability, this upgrade has reduced line
loss, which saves, on average, $100 per mile of line per year.

Kenergy has reduced the size of its vehicle fleet from 112 units to 108. The cooperative
expects to reduce another 2 units in 2016. Between 2011 and 2014, fleet maintenance
costs have declined 1.2 percent and expenses for 2015 are on track to achieve another
decrease of about 0.5 percent.

The cooperative has changed the way it provided uniforms to employees. Clothing
expenses declined from $86,257 in 2011 to $50,467 in 2014, a reduction of 41.5
percent.
What has Kenergy done to increase revenue since 2011?

The cooperative leases cell tower space to various tenants, such as giant
telecommunications companies. This has increased the cooperative’s income by
$55,000 per year since the last rate increase.
Did the new meters cause this rate increase?
No, very little expense related to the digital meter project is included in this rate case. In fact,
this proposed increase was projected in Kenergy’s long-range plans before co-op officials
started studying digital meters.
Here are some no- to low-cost ways to save on monthly utility bills:

If you lower your water heater setting from 140 degrees to 120 degrees, you can save
up to $48 a year (using the new proposed Kenergy rate).

Each time you lower your thermostat 1 degree in winter, you can save 3 percent on your
heating bill. If you lower it 3 degrees, for example, you can save nearly 10 percent on
energy costs. The same is true of summer. Raise the thermostat 1 degree and save
about 3 percent.

Every time you replace an incandescent light bulb with a CFL equivalent, you save $11 a
year on electricity. (Kenergy gives away energy-efficient bulbs on Member Appreciation
Day and Annual Meeting.)
 Caulking around windows and doors, making sure weather stripping around doors and
windows is tight, and taking other actions to seal your home can save up to 10 percent
on heating and cooling costs per year.
Can I read the rate filing?
Ads with all the details about the rate filing will run in every newspaper in Kenergy’s service
territory. In all, those ads will run three times. This information also is posted on the co-op’s
website and the PSC’s website.
Also, a copy of the application is available for public inspection at Kenergy’s offices, which
include its Henderson headquarters and five other offices (Owensboro, Hawesville, Hartford,
Hanson and Marion).
How can members voice their opinions about this rate case?
Any corporation, association or person may, by written request within 30 days after Kenergy’s
notice appears in local newspapers, request to intervene in the proceeding.
That written request must be submitted to the Kentucky Public Service Commission, PO Box
615, 211 Sower Boulevard, Frankfort, KY 40601. The letter should set forth the grounds for the
request, including the status and interest of the party.
Intervention may be granted beyond the 30-day period for good cause shown.
Interveners may obtain copies of Kenergy’s application at the PSC by contacting Kenergy, 6402
Old Corydon Road, Henderson, KY 42420, or by calling (800) 844-4832. The application is also
available at every Kenergy office and on the co-op’s website. A link to the PSC document is at
kenergycorp.com on the RATE page.
**Commercial and industrial members who have questions about the rate increase should
contact key account executives Todd Blackburn or Kyle Heavrin at (800) 844-4832.