Last year, we told you that Louisville Gas and Electric (LG&E) and Kentucky Utilities (KU) had asked to raise their rates. (Here’s our original post on the proposal.) Now we know how it turned out.
On February 16, 2026, the Kentucky Public Service Commission (PSC) approved new rates for both utilities. The increases are smaller than what the companies originally asked for, but they’re still increases. Here’s what changed, what didn’t, and what it means if you’re thinking about solar.
What Was Approved
The PSC approved a settlement between the utilities and several other parties, with some changes. For the average residential customer:
| Utility’s original request | Approved | Average monthly change | |
|---|---|---|---|
| KU electric (about 1,085 kWh/month) | 11.5% | 6.54% | about +$8.73 |
| LG&E electric | 8.3% | 4.73% | about +$5.14 ($108.76 → $113.90) |
| LG&E natural gas | 14% | 11.09% | about +$8.27 ($74.59 → $82.86) |
The new rates apply to service on and after February 16, 2026, so most customers will see them on their next full bill. This is the companies’ first base-rate increase since 2020. The utilities pointed to infrastructure upgrades and storm recovery costs, among other expenses.
Your exact change depends on how much energy you use. Homes that use more electricity, including many all-electric homes, will see a bigger dollar increase.
Base Rates Are Set Until August 2028, but Your Bill Can Still Move
As part of the settlement, LG&E and KU agreed that new base rates won’t take effect before August 1, 2028. That’s a real period of stability for the core part of your rate.
It isn’t a full freeze on your bill, though. Electric bills in Kentucky also include adjustments and surcharges, such as fuel costs, that can change month to month. And once 2028 arrives, the utilities can ask for new rates again.
The Solar Piece Most People Missed
Buried in these same rate cases was a proposal that mattered a lot for solar.
When your solar panels make more electricity than your home is using, the extra goes to the grid, and the utility credits your bill. LG&E and KU proposed cutting that credit nearly in half. For KU customers, it would have dropped from about 7.5 cents per kWh to about 3.9 cents.
The final orders kept the solar credits at their current levels: about 7.5 cents per kWh for KU and about 7.1 cents per kWh for LG&E. Those credits carry forward on your bill.
That’s good news for anyone in LG&E or KU territory considering solar. It’s also a reminder that these rules can change in future rate cases, so they’re worth watching.
How Solar Works on Your LG&E or KU Bill Today
Solar saves you money in two ways:
- Electricity you use as it’s produced. When your panels are powering your home directly, you aren’t buying that electricity from the utility at all, so you avoid the full retail rate, including this year’s increase.
- Extra electricity you send to the grid. That earns a bill credit at the export rates above, which is less than the retail rate.
Because the electricity you use at home is worth more than the electricity you export, the best savings usually come from a system sized to your actual usage. A home battery can help too, by storing midday solar for use in the evening instead of exporting it. If you’re curious how sizing works, see How Many Solar Panels Do I Need?
The Bigger Picture
Rate increases come in steps: a request, a decision, a few years of stability, then another request. Solar panels are built to produce for 25 years or more, which spans many of those cycles. Every kilowatt-hour your panels produce for your home is one you’re not buying, at whatever the rate happens to be that year.
If this month’s news has you thinking about solar for your Louisville or Lexington-area home, we’re glad to walk you through the numbers for your bill. Learn more about solar in Louisville, solar in Lexington, or solar across Kentucky, explore solar financing options, or request your free quote.
Icon Solar has helped homeowners across Ohio, Kentucky and Indiana go solar since 2009. Call us at (866) 396-4266.
Frequently Asked Questions
How much is the LG&E and KU rate increase?
The Kentucky PSC approved an average residential increase of 6.54% (about $8.73 a month) for KU electric customers and 4.73% (about $5.14 a month) for LG&E electric customers. LG&E natural gas customers will see an average increase of 11.09%, about $8.27 a month.
When did the new LG&E and KU rates take effect?
The new rates apply to service on and after February 16, 2026, the date of the PSC’s final orders.
Will LG&E and KU raise rates again soon?
Under the approved settlement, new LG&E and KU base rates won’t take effect before August 1, 2028. Fuel and other adjustments on your bill can still change in the meantime.
Did the rate case change net metering for solar customers?
LG&E and KU proposed cutting the solar export credit nearly in half, but the PSC’s final orders kept it at the current levels: about 7.5 cents per kWh for KU and about 7.1 cents per kWh for LG&E.
Does solar still make sense in LG&E and KU territory?
For many homes, yes. Solar electricity you use at home offsets the full retail rate, and extra solar sent to the grid earns a bill credit. A local installer can estimate savings based on your actual usage and roof.
