Duke Energy Corporation’s (DUK) utility subsidiary Duke Energy Kentucky reached a settlement agreement with the Kentucky Attorney General in its natural gas rate case.
Under the settlement agreement, Duke Energy has asked the Kentucky Public Service Commission to approve the negotiated rate increase for natural gas delivery service of approximately $13 million, or 10.4% on total gas revenues, to be effective early 2010. The original request was for $17.5 million, or a 14% increase.
For an average residential customer using 70 ccf (ccf is 100 cubic feet) of natural gas per month, a typical monthly bill of $82.21 will increase by $11.52 to $93.73.
Since its last natural gas delivery rate case implemented in 2006, Duke Energy Kentucky has invested more than $60 million to continue the accelerated gas main replacement program (AMRP), which has been a major reliability and safety initiative for the company’s gas operations. The rate change would allow the company to begin to recover its costs for this additional investment.
The 10-year AMRP program began in 2000 with the goal of replacing 209 miles of high-maintenance cast iron and bare steel gas mains and services with low-maintenance polyethylene pipe. Benefits of the AMRP include increased customer safety and system reliability, higher system operating pressure, lower line losses, and stable operation and maintenance expenses. Till date the program is 82% complete and scheduled for completion in 2010.
Duke Energy Kentucky operations provide natural gas service to approximately 95,000 customers in Northern Kentucky. The company also provides approximately 1,100 megawatts of electricity capacity to approximately 135,000 customers.
Based in Charlotte, North Carolina; Duke Energy is a diversified energy company. The company is the third largest electric power holding company in the U.S., based on kilowatt-hour sales. It supplies electricity to approximately 4 million U.S. customers. It has approximately 36,000MW of electricity generating capacity in the Midwest and the Carolinas. We have a Neutral recommendation on the shares of Duke Energy.
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