Posted March 12th, 2010 5:57 am

Last night the Lexington Urban County Council unanimously endorsed the state attorney general’s intervention on behalf of city residents in Kentucky American Water’s request for a rate increase of almost 38 percent.

And Beverly Fortune also notes that:

Council also asked that representatives of Kentucky American come to council’s work session Tuesday to explain the rate request and answer questions.

That will be a delicate tap-dance by Kentucky American. Their easiest route would be to remind the council that the city of Lexington approved the spending of the $160 million in 2008, but that would be a bit indelicate, given the campaign season about to heat up. Their representatives will earn their $160 million with their Tuesday performance.

[Original post below]

In 2008, Kentucky American Water Company proposed building a new water treatment plant in Lexington. The council vigorously opposed the plant, citing concerns about whether there were less expensive alternatives for Lexington’s water customers, and urged Mayor Newberry to explore alternatives. Mayor Newberry ignored those concerns, and supported the plant.

Now, fittingly enough, in the months before this election year brings voters to the polls, Lexingtonians are being told how much they are being soaked for: $160 million, or a whopping monthly increase of 37 %. Newberry now claims to oppose paying for the very water plant that he pushed through over objections of other council members. This is pretty weak stuff, acting shocked when the bill is brought for his previous actions.

From Jim Gray’s Facebook note / press release:

Vice-Mayor Jim Gray today proposed a resolution be brought before the Urban County Council, asking the Attorney General to take steps to make sure that Fayette County citizens are protected during the rate increase proceedings before the Public Service Commission.
Vice Mayor Gray’s also requested that the Executive leadership of Kentucky American Water Company appear before the Council to explain in detail its proposed rate increase request.
“In January 2008, along with several members of the Urban County Council, I asked Mayor Newberry to conduct a financial study of more affordable options to Kentucky American Water’s plans to construct a $160 million dollar new water plant. The Mayor refused,” said Vice-Mayor Gray.
“At the time, we warned that proceeding with this project would lead to future large rate hikes. But with the backing of the Mayor, Kentucky American was allowed to continue with their $160 million dollar construction project.
The Attorney General is the ratepayer’s advocate, and I trust that he will fight hard to mitigate this extraordinary request from KAWC. At a time when many citizens of Lexington are struggling to pay their bills, the idea of hitting them with an increase on their monthly water bills by thislarge amount is unconscionable to imagine. As elected leaders, we must ask tough questions and look at options available to us to get to the bottom of how this figure was determined and what we can do about it to protect the citizens of Lexington.”

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