The request by Kentucky Utilities and Louisville Gas & Electric to increase utility rates in the Commonwealth is moving forward.

Attorney General Jack Conway recently sent a request to the Public Service Commission (PSC) to halt consideration of the rate increase. The PSC denied the request.

According to a press release from the PSC, the hearings for the rates will “proceed as scheduled.”

Conway asked the PSC to dismiss the rate cases because of the proposed sale of the two utilities, currently subsidiaries of E. ON U.S. LLC, to PPL Corp. A separate application seeking approval of the sale is before the PSC.

In the release, the PSC said that the issues raised by the AG in seeking dismissal of the rate cases can be explored during the hearing. At the conclusion of the hearing, the AG may renew the request to dismiss the rate cases.

Conway argued, however, that the sale of KU and LG&E, if approved, would change the financial condition of the companies. Therefore, the financial data continued in the rate application would no longer be an appropriate underpinning for the rate request, the AG said.

LG&E and KU responded that Conway was citing documents that referred to the sale’s effect on the financial condition of PPL, not LG&E and KU.

The PSC agreed. It also noted that there are several precedents, including one involving LG&E, for continuing the consideration of rate adjustment requests while a proposed sale of the utility is pending before the PSC.

As in those past cases, the AG will have an opportunity to “fully explore the financial impacts of the acquisition” on the utilities during the separate proceeding, the PSC said in a release.

KU has about 506,000 electric customers in 77 counties across Kentucky.

KU and LG&E’s applications and related documents are available on the PSC website, psc.ky.gov. The case numbers are 2009-00548 (KU) and 2009-00549 (LG&E).

The PSC is an independent agency attached for administrative purposes to the Energy and Environment Cabinet. It regulates more than 1,500 gas, water, sewer, electric, and telecommunication utilities operating in Kentucky and has approximately 100 employees.

Stephen Woodward is a Staff Writer for the Daily News. He may be contacted at swoodward@middlesborodailynews.com.