Louisville Gas and Electric (LG&E) filed a rate case in May of 2025, asking to increase customer bills by 10.12% to “to enable LG&E to continue providing safe and reliable service to its customers, and to afford LG&E a reasonable opportunity to earn a fair return on its investment property used to provide that service while attracting necessary capital at reasonable rates.” For LG&E customers, this would have been an increase of approximately $11 per month for electric and gas. In its final decision on February 16, 2026, the Kentucky Public Service Commission (PSC) approved a smaller increase of 4.8%, or about $5 more per month. This is lower than the original request but still raises bills. LG&E started charging the 10.12% increase in January 2026 before the final approval, which they had to refund to ratepayer’s accounts. Shortly after, LG&E requested a rehearing based on a number of changes to a settlement agreement they had made with certain parties, including the Attorney General.. The PSC granted this rehearing in March 2026, and began proceedings to evaluate LG&E’s claims.  

To summarize the rehearing, LG&E:

• Withdrew from the stipulation (which cut the rate increase by approximately 60%);
• Requested to recover the cost of keeping Mill Creek 2, an old coal plant, open, even those costs invested before approval;
• Requested increasing their Return on Equity (ROE), or profit;
• Requested approval of a negotiated guaranteed minimum ROE, even if approved rates weren’t enough to earn that rate; and,
• Additional requests. 

A final order from the PSC was filed on August 17th, 2026. Overall, the PSC denied reconsidering it’s order adjusting certain provisions of the settlement, keeping the rate increase at 4.8%. 

The request for recovering the already-spent cost to keep Mill Creek 2 open was granted. The PSC allowed LG&E to record $7.5 million in costs related to keeping Mill Creek 2 open. However, LG&E cannot recover those costs through the current monthly fee that was approved in February. LG&E could come back in future base rate cases to cover this cost. The PSC also denied increasing LG&E’s ROE from 9.775% to 9.90%, and denied the guaranteed minimum ROE. 

Finally, the PSC approved the request to raise the cap on the monthly fee (called the Adjustment Clause PGR) used to help pay for the construction of Mill Creek 5, LG&E’s new gas plant. The PGR is a monthly fee added to ratepayer’s bills to cover incremental construction costs. LG&E stated in the rehearing that construction costs for Mill Creek 5 and the Marion Solar facility have increased. However, the PSC set a limit on how much customers can be charged to encourage LG&E to control their construction costs and mitigate more bill increases. 

What does this mean? Overall, LG&E customers’ monthly bills have increased by 4.8%, but future increases are still possible. Ratepayers could be requested in future rate cases to cover the construction of new gas plants, rising construction costs, and the costs of keeping an old coal plant open. LG&E may also file future rate cases to recover additional costs for these new gas plants, which will be utilized to meet the electricity demand from proposed data centers in Kentucky. These costs may ultimately be passed on to customers.