The Kentucky Public Service Commission has denied a request by Louisville Gas & Electric and Kentucky Utilities to deploy “smart meters” to their 1.3 million customers during the next five years, at an estimated cost of $350 million.
In an order issued Thursday, the commission said that the utilities provided insufficient evidence to justify the expense. Even though the application was denied, the utilities can resubmit in the future, the commission said in a news release.
In an emailed statement, LG&E and KU said: “We are disappointed in the Commission’s decision to deny our request to offer the benefits of advanced meters to all of our customers. Right now, we are evaluating the Commission’s decision and working to determine what direction we should take moving forward.”
In rejecting the application, the PSC cited several inconsistencies in the case presented by the utilities, including conflicting calculations of net savings and differing projections of the expected service life of the advanced meters, according to the release.
The smart meters that LG&E and KU sought approval for would have been deployed to homes and businesses and could transmit real-time data on customers’ power use.
During the life of the smart meters, customers would “see a benefit of nearly $1 billion,” the utilities promised. The proposal had an upfront cost to customers, though.
In June, the commission sought public comments after requests made by the Metropolitan Housing Coalition — an affordable housing advocacy nonprofit that has intervened in this PSC case — and state Representatives Attica Scott and McKenzie Cantrell, two Louisville Democrats.
LG&E and KU had proposed a $511 million smart meter deployment in 2016 as part of a larger request to double the fixed monthly charge for residential customers but withdrew that PSC request in a 2017 settlement.
KU proposed to replace about 531,000 electric meters, while LG&E proposed to replace about 413,000 electric meters and to retrofit about 334,000 natural gas meters, according to the commission.
The utilities estimated that the total capital cost of the new meter systems would be $165.2 million for LG&E — $103.7 million for electric and $61.5 million for natural gas — and $146.7 million for KU. The cost to deploy the new meters would have been an additional $13.3 million for LG&E and $15.2 million for KU.
According to the PSC, the utilities contended that the meters would last 20 years but produced minimal evidence in support of that assertion.
In its statement, LG&E and KU said it would continue to offer the Advanced Meter Early Adoption Program to customers” interested in learning more about their energy usage patterns and ways to be more energy efficient.”