Louisville Gas and Electric Company (LG&E) and Kentucky Utilities Company (KU), subsidiaries of PPL Corp (NYSE:PPL), announced on October 20, 2025, that they filed a stipulation and recommendation with the Kentucky Public Service Commission (KPSC) to resolve issues regarding proposed revenue increases.
The agreement proposes a revised aggregate increase in annual electricity and gas revenues of approximately $235 million. This comprises increases of $58 million in electricity revenues and $45 million in gas revenues for LG&E, alongside a $132 million increase in electricity revenues for KU. The agreement also sets a revised authorized return on equity (ROE) of 9.90%.
Under the terms, LG&E and KU commit to refrain from implementing effective base rate increases before August 1, 2028, subject to certain exceptions. To support this commitment, the agreement proposes two new rate tracker mechanisms: a Generation Cost Recovery Adjustment Clause (GCR) and a Sharing Mechanism Adjustment Clause (SM). The GCR mechanism would allow for the recovery and return on investment for covered costs of new generation and energy storage assets as they enter service, excluding fuel amounts. The SM mechanism would address any base rate revenue deficiency or surplus occurring between July 2027 and July 2028, outside a suggested ROE band of 9.40% to 10.15%, with collection or return to customers beginning November 2028.
LG&E and KU President John R. Crockett III stated, "This agreement would allow us to continue making necessary system enhancements, upgrade aging equipment and enhance service for our customers." The agreement further authorizes regulatory deferral accounting for expenses such as pension and post-retirement benefits, storm restoration, and vegetation management. Based on average usage, residential electric customers for KU would see a monthly bill increase of $9, LG&E electric customers $5.04, and LG&E gas customers $8.10.
A KPSC hearing is scheduled to commence on November 3, 2025. LG&E and KU anticipate a ruling from the KPSC during the fourth quarter of 2025, though the KPSC has until March 31, 2026, to issue its final order.
