Summary: LG&E and KU improve energy affordability by focusing on long-term customer value. Highlighted in this article are four of those operational levers: selfservice automation that meets customers where they are while lowering costs, agency partnerships for low-income assistance, proactive grid hardening, and machine learning to target high-propensity customers. Together, these investments help maintain safe, reliable service while reducing unnecessary costs and pressures that can impact customer bills over time.
Across the country, utilities are balancing heavier energy burdens on one side and increasing customer vulnerability on the other. Among the 1,199 U.S. utilities tracked by PressurePoint, approaches to addressing affordability range drastically. Yet Louisville Gas and Electric Company and Kentucky Utilities Company (LG&E and KU) – which together serve nearly 1.4 million customers across Kentucky and in Virginia – stand out from the pack by demonstrating how a disciplined, customer-focused operating strategy can create new pathways to affordability without sacrificing reliability, service quality, or long-term system performance.
Their solution is simple: prioritize affordability in their everyday operations centered on delivering value for customers. LG&E and KU are not chasing complexity or attentiongrabbing programs. Rather, they are simply giving customers the tools and information they need to stay in control of their energy experience while striving to hold down costs and building their grid with customer impacts – and how to best mitigate them – in mind. Not only is this approach more durable, but it allows them to orient their operations along a single mandate: deliver safe, reliable service at the lowest reasonable cost while continuing to invest in the infrastructure and technology customers depend on every day.
How are LG&E and KU improving energy affordability?
Their affordability strategy is driven by operational efficiency and long-term value creation for customers. By investing in self-service channels, partnering with agencies for community assistance support, maintaining grid reliability, and adopting data-driven targeting for program adoption LG&E and KU are able to reduce cost while simultaneously reducing friction – thus increasing affordability and improving the overall customer experience.
For instance, by shifting customers to low cost self-service – including a robust Interactive Voice Response (IVR) system, mobile app, and online account management – LG&E and KU have managed to reduce the cost-to-serve to “pennies a transaction” for most customer interactions while expanding convenience and 24/7 accessibility for customers.
These improvements are already delivering meaningful outcomes:
- Resolved ~55-60% of problems through IVR automation – far exceeding the industry standard of 30-40%
- Enabled 24/7 access to nearly one million customer accounts without increasing staffing requirements
- Reduced operational costs, helping minimize upward pressure on customer rates while maintaining strong customer service capabilities
This is an example of stronger allocation of resources to meet customers where they are and empower users to manage issues as they arise without mandating complex processes or waiting on hold, creating more value for customers from every operational dollar spent.
How do LG&E and KU support low-income customers?
In Kentucky, assistance programs are administered through third-party agencies, not the utilities themselves. The utilities also support their communities’ most vulnerable members through partnerships, an annual employee giving campaign and support from its Foundation. As a result, LG&E and KU act as a data and funding coordinator – connecting vulnerable customers with support – without building out and operating costly internal infrastructure themselves. This allows more resources to remain focused on direct customer support to the utilities’ most vulnerable customers.
Within this system, LG&E and KU:
- Provide authorized third-party agencies with real-time access to customer billing data through a dedicated portal
- Enable pledging of assistance funds directly to accounts
- Maintain a liaison team to support system functionality without ballooning administrative costs
In line with their other efforts, this approach keeps overhead low by delivering support more efficiently to customers where help is known to be needed through sources better equipped to provide that support, while helping ensure assistance reaches customers efficiently through trusted community organizations.
What are LG&E and KU doing to improve grid resiliency?
LG&E and KU’s strategy is focused on making calculated investments today to avoid higher costs tomorrow while improving reliability and system hardening for customers. By ensuring the electric system remains reliable and resilient, they plan to make it more cost effective in the long-term for both the utilities and their customers by reducing outage impacts, improving operational awareness, and strengthening system performance. As a result, LG&E and KU have been making active investments in:
- Hardening the physical grid presence (e.g. replacing wooden structures with steel)
- Expanding advanced metering infrastructure to improve system monitoring and response
- Implementing broader storm-resilience upgrades designed to better withstand severe weather conditions
While infrastructure modernization does influence rate pressure in the near term, a more resilient grid can help decrease the frequency and duration of outages while reducing long-term reliability risks and improving the dependable service customers rely on every day.
By having the foresight to proactively make these improvements, LG&E and KU are prepared to make smart investments and reduce periods of high demand or service disruptions.
How do LG&E and KU use data to improve affordability?
LG&E and KU recognize that customer behavior is not one-size-fits-all and leverages machine learning to shift from blanket outreach to propensity-based targeting. By being able to identify the specific customers, they are able to better target their messaging to improve:
- Enrollment in programs (such as paperless billing)
- Adoption of cost-saving behaviors
- Engagement with marketing communications
LG&E and KU accomplish this while helping customers receive more relevant information, resources, and opportunities to simplify account management.
Their data investment also extends to their proactive outage communication systems. Through SMS alerts, media partnerships, and a dedicated outage map, LG&E and KU ensure customers receive proactive, timely updates that:
- Notify only those impacted
- Provide clear and targeted restoration timelines
- Offer actionable guidance – especially during extreme weather
By giving specific customers the specific information they need before they need it, early results show this data-driven system reduces inbound call volume while improving the customer experience and increasing trust, particularly during high-stress situations like severe weather events.
The key takeaway is clear: utilities rarely communicate with individual concerns in mind, but by focusing on propensity rather than broad assumptions, LG&E and KU cut out wasted outreach and operational burden while simultaneously improving both customer conversion and satisfaction through more useful, timely, and customer-centered communication.
What can other utilities learn from LG&E and KU?
LG&E and KU offer six transferable lessons for utilities navigating affordability pressure – proving the work doesn’t require trade-offs so much as precision. By optimizing the fundamentals and giving precedence to the customer’s needs, they have discovered several critical lessons the industry can learn from:
- Affordability can be considered operational and systemic, not based on programs
- Cost-to-serve is one of the most influential levers utilities control
- Automation should empower customers, not deflect responsibility
- Proactive, data-driven targeting provides customers relevant, timely information when they need it most
- Partnerships can scale support more effectively than in-house offerings
- Investing in infrastructure early mitigates long-term rate pressures and supports stronger long-term customer value
FAQ
What is utility rate pressure?
Utility rate pressures are the financial and operational costs associated with higher customer energy bills. When combined with customer fiscal difficulties, it makes utility affordability more challenging.
What is causing rate pressures across the industry?
Utility rate pressure is being driven by a combination of rising infrastructure costs, climate-related reliability needs, and broader economic inflation – the costs of which flow into customer rates.
The biggest drivers include:
- Aging infrastructure replacement
- Grid modernization efforts
- Rising electricity demand
- Inflation and supply chain costs
- Severe weather and climate impact
How can utilities balance affordability and reliability for customers?
Utilities improve affordability and reliability by reducing their own cost-to-serve, investing in efficient infrastructure, and helping customers manage and reduce energy burden while continuing to provide safe and dependable service.
Key approaches include:
- Improving operational efficiency to reduce volume and administration costs
- Expanding self-service tools to complete tasks without agent support
- Using AI and analytics to reduce waste and streamline workflows
- Reducing outage and emergency costs through grid resilience and faster restoration practices
- Targeting assistance programs more efficiently to reach customers most likely to need support
How are utilities using AI to reduce cost?
Utilities are using AI to lower operating costs by automating routine work, improving decision-making, and reducing the need for expensive manual processes. This allows them to shift resources to addressing more complex or sensitive customer needs while improving service quality and responsiveness.
Key ways AI is reducing costs include:
- Automating customer service tasks to handle common requests and reduce cost-per-interaction
- Targeting customer communications more efficiently to identify high-propensity customers and reducing marketing waste
- Optimizing workforce and operations with forecasted demand for system resources
- Improving outage response and restoration by anticipating outage locations to proactively communicate and prepare responses
Why is customer communication important for utilities?
Strong customer communication improves customer safety, trust, and confidence in the operational effectiveness of the utility. When customers receive timely and clear information, they can make better decisions during outages, billing changes, and emergencies – reducing confusion and mitigating unnecessary demand on utility infrastructure.
Where does your utility stand?
LG&E and KU are just one example of how utilities are navigating the evolving challenges of affordability. Performances vary from companies treading water to those who are using advanced analytics and data enrichment to find proactive affordability opportunities while improving customer value and operational performance.
The question is: how does your utility compare?
You can see how over 1,000 U.S. utilities stack up against their peers with PressurePoint:
https://pressurepoint.blastpoint.com/
And you can find out how to turn your standing into an actionable framework with the PressurePoint Affordability Playbook:
https://pressurepoint.blastpoint.com/playbook
About this analysis: Findings draw on publicly available LG&E and KU operational disclosures, Kentucky Public Service Commission filings, and BlastPoint’s PressurePoint benchmarking dataset covering 1,000+ U.S. utilities.
Last updated July 13, 2026.
