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Kentucky American Water plans rate increase without regulatory approval

LEXINGTON, Ky. (WKYT) - Despite not yet getting regulatory approval, Kentucky American Water plans to move forward with a rate increase that will mean a nearly $6 increase for the average customer.

"Kentucky American Water respects the difficult work of the PSC in considering rate requests, and the importance of their review process to our customers," said Cheryl Norton, president of Kentucky American Water. "However, because current rates do not cover the immense amount of capital expenditures made since 2010, we must now implement rates to begin recovering those costs."

Kentucky American Water says should the ultimate rate increase allowed be less than it requested, customers will receive refunds with interest.

The implementation of the rate increase means the average residential customer using approximately 4,500 gallons of water per month will see an increase of $5.76 per month, from $32.75 to $38.51 per month.

Kentucky American Water's last rate increase occurred almost three years ago in late 2010. Since that time, the company says approximately $58 million has been invested in necessary infrastructure system improvements.

The rate request pending before the PSC has completed the required review process, with all informational deadlines having been met, a public meeting on May 28, 2013 and commission hearings on June 4-5, 2013 conducted, and the statutory suspension period of seven months now completed.

Once the required suspension period has passed, state law allows a utility to implement the full rate increase requested while the PSC continues its evaluation and completes its determination, which could occur as late as October 28, 2013.

Mayor Jim Gray is asking the PSC to deny the increase.

"They built a plan on the back of Lexington's rate payers, Lexington's citizens. This is just wrong. It was a bad business decision," said Mayor Gray.

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