Nathaniel Hopkins
1088 Chinoe 
Lexington, KY 40502
Phone:8592964807
E-Mail:nhopkins@insightbb.com


TO: Commissioners

Kentucky Public Service Commission

RE: Case No. 2012-00221


Dear Commissioners:


I am a residential customer of KU. I write to oppose KU's structure of rate increases on electric service. If any increase is due, I oppose the allocation of the increase to the monthly service charges. KU wants to raise the monthly electric service charge by 53% (from $8.50 to $13.00) and the kWh rate by only 3.5% (from 6.987 cents to 7.253 cents).

This proposed rate structure violates fundamental rules of free market economics. Any rate increase should be allocated to the unit of energy ("volumetric pricing"), not to the monthly service charge. KU already enjoys a monopoly and guaranteed profits. It doesn't need a higher monthly service charge.  Increasing the monthly service charge insted of the kWh price:

Unfairly and unjustly diminishes the returns of prior investors in efficiency;

Unreasonably discourages future investments in efficiency;

Unreasonably rewards wasteful users of energy;

Unjustly and unfairly impacts those who use energy sparingly (i.e. - the poor, the elderly and the efficiency-minded), and;

Unreasonably impairs deployment of renewables and distributed generation;


In short, KU's proposed structure is terrible public policy. A public utility with a grant of monopoly should not employ such a pricing structure. I ask that the Commission not allow it, either after hearing or in any proposed settlement.


Sincerely,

Nathaniel Hopkins