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Unaverage Electric Rates

  I got several calls and cards about the map we ran in the April issue showing Kentucky’s electric rates tied for the lowest in the nation. Why aren’t my rates 4 cents a kilowatt-hour? readers wondered.

  The reason is, those numbers were averages. And you’re probably not average. 

  The most important difference between what you pay and the 4-cent figure is that it averages residential, commercial, and industrial rates. Industrial rates tend to be lower than commercial and residential rates. Because industries use large amounts of power, and often operate around the clock, it costs less per kilowatt-hour to serve them, and rates reflect that cost of service. 

  Looking at residential rates only, Kentucky ranks fourth lowest, with an average residential rate of 5.58 cents a kilowatt-hour, compared with the U.S. average of 8.43 cents.

The map above shows residential rates only-a comparison that might come closer to reflecting your rates. The April map averaged residential, commercial, and industrial rates.

  But your rates still might not match this map, because of another kind of average used, that affects both this map and the one we printed in April. That average combines the rates of the 62 different electric utilities all across Kentucky to get a single figure for the whole state-different conditions in different parts of the state result in differences in rates.

  Using averages is a simple way to make a point, but it rarely tells the whole story. The most important overall point may be best demonstrated by the people who have the job of trying to attract new businesses to Kentucky. One of the top reasons they cite for why a company should move here is Kentucky’s extremely low electric rates.

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