Kentucky utilities seek approval for full smart meter rollout

The companies asked the commission to issue a final order in the proceeding by June 1

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Louisville Gas and Electric and Kentucky Utilities filed with the Kentucky Public Service Commission for the full deployment of advanced metering systems across their Kentucky service territories, including gas operations for LG&E, and to approve their proposed advanced metering opt-out special charges.

The companies noted that they first proposed a full advanced metering deployment in the context of their 2016 Kentucky base-rate cases.

In conjunction with their agreement to withdraw their requests for full deployment of advanced metering in settling those cases, the companies said that they agreed to initiate an advanced metering collaborative involving the companies and all interested parties to the rate cases to discuss any concerns about advanced metering.

Through the advanced metering collaborative – which consisted of five day-long monthly meetings consuming about 40 hours held in Lexington, Louisville, or Frankfort – the companies said that they sought to identify and address participants’ interests and concerns regarding advanced metering and to educate participants on the benefits of advanced metering deployment.

The companies said that they have determined that now is the appropriate time to invest in full deployment across their territories, with the proposed advanced metering deployment expected to begin in 3Q18 with certain information-technology items being deployed, followed by the first meters being deployed in 2Q19.

The total advanced metering deployment is scheduled to be completed in the companies’ Kentucky service territories by the end of January 2021, the companies said.

Assuming a 0.8 percent opt-out rate, a total of about 413,000 electric meters would be replaced and about 334,000 advanced metering gas indices would be added in LG&E’s service territory, the companies said.

In KU’s Kentucky service territory, a total of about 531,000 electric meters would be replaced – again assuming a 0.8 percent opt-out rate, the companies noted.

The advanced metering meters that the companies propose to deploy would have two-way communication capabilities that would communicate usage and other relevant data to the companies at regular intervals and have the ability to receive information from the companies, such as software upgrades.

The companies added that nearly 900,000 of the advanced metering electric meters would also have remote service switching capabilities; advanced metering equipment planned for gas service would not have such capabilities.

The estimated capital cost of the proposed advanced metering deployment – i.e., during the deployment phase – for LG&E is $103.7 million for LG&E electric and $61.5 million for LG&E gas, the companies said. For KU in its Kentucky service territory, the estimated capital cost of the proposed deployment – during the deployment phase – is $146.7m.

The companies added that the full advanced metering deployment would also result in incremental O&M cost during the deployment phase of $10.6 million for LG&E electric, $2.7 million for LG&E gas, and $15.2 million for KU in Kentucky.

According to the companies, the proposed advanced metering deployment would achieve operational efficiencies, as well as enhance the present quality of service and provide additional benefits to – and options for – LG&E and KU customers.

The companies estimate that the full deployment and operation of advanced metering across their Kentucky and Virginia service territories from 2018 through 2040 would provide net benefits of nearly $483 million nominal ($28.5 million net present value to 2018).

Also, the proposed deployment would further enable the companies to develop time-of-day or more dynamic rate structures that may assist customers to reduce their bills, the companies said. Among other things, the companies said that the proposed deployment would enhance their ability to localize and resolve power outages, and thus reduce customer outage times.

The companies asked the commission to issue a final order in the proceeding by June 1.

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