PSC grants rate increase to NKY Water District - Cincinnati News, FOX19-WXIX TV

PSC grants rate increase to NKY Water District

FRANKFORT, KY (FOX19) - The Kentucky Public Service Commission (PSC) has granted a rate increase to the Northern Kentucky Water District, but reduced the requested amount to reflect questionable expenditures by the district.

In an order issued Friday, the PSC found that Northern Kentucky Water had justified the need for additional revenue in order to meet increased costs and to pay for system improvements.

However, the PSC also criticized the district for spending money on club memberships, employee gifts, promotional items and other expenditures not tied to the delivery of water to customers. The PSC said the expenses could not be charged to customers and should not be repeated in the future.

Northern Kentucky Water will be allowed to increase its rates across all classes of customers in order to generate an additional $8.07 million in revenue per year, which reflects a reduction of $84,000 from the requested amount. A PSC analysis indicated that Northern Kentucky Water could have justified an increase of as much as $11.6 million, based on its revenue needs for operations and debt service.

The company estimated that its proposal would increase the average quarterly bill for residential customers to $122.98, an increase of $24.36, or about 25 percent from the current average of $98.62. Those increases will be slightly smaller due to the $84,000 revenue reduction ordered by the PSC.

In order to reduce the impact on customers, Northern Kentucky will implement the rate increases in two equal phases at the beginning of 2011 and 2012.

Northern Kentucky's last rate increase took effect in December 2007. The water district serves about 80,000 customers in Boone, Campbell and Kenton counties in northern Kentucky and provides wholesale water service to the city of Walton and the Bullock Pen and Pendleton County water districts.

The order and related documents are available on the PSC website, psc.ky.gov, by going to this location: http://psc.ky.gov/efs/EFS_Search.aspx, and entering case number 2010-00094.

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