(LOUISVILLE, Ky. - Sept. 30, 2005) As a result of the dramatic price increases in wholesale natural gas costs due to both national supply factors and recent hurricane activity, Louisville Gas and Electric Company (LG&E) filed a request today with The Kentucky Public Service Commission to increase natural gas rates by 64 percent.

If the adjustment is approved, a typical residential customer with average usage of 80 Ccf per month will pay $143.96 effective Nov. 1, 2005. That compares to $87.85 per month based on the rates for the same quarter one year ago - an increase of about 64 percent. The new rates will remain in effect through Jan. 31, 2006.

Natural gas prices are driven by competitive conditions in the U.S. marketplace stemming from inadequate supply to meet demand - not by LG&E. In the aftermath of Hurricanes Katrina and Rita — which drastically slowed natural gas production — the price of natural gas has continued to rise. The U.S. Energy Information Administration expects wholesale natural gas prices to continue to rise through the winter.

Like other utilities across the nation, LG&E does not profit from the cost of the gas that it distributes. LG&E's gas supply costs are passed directly to customers on a dollar-for-dollar basis following review by the Kentucky Public Service Commission. If gas supply costs increase, so do natural gas bills. Likewise, if costs decrease, bills are reduced.

"LG&E, despite its efforts to keep customer costs low through gas storage and economic purchasing strategies, joins the rest of the nation in feeling the Hurricanes' impact on the price of energy, including natural gas," said Vic Staffieri, LG&E Energy's Chairman, CEO and President. "We understand that any price increase places a burden on our customers and urge them to take measures now to control usage this winter."

LG&E continues to stress conservation as the best way for customers to combat higher prices and falling temperatures, including the following:

• Join LG&E's Budget Payment program to normalize your costs over a 12-month period.
• Schedule an energy audit. The audit is $15, through LG&E. Call (800) 251-7808 for details.
• Attend an upcoming Project Warm energy management workshop (see below).
• Check the amount of insulation in your home.
• Have your ductwork inspected and cleaned by a professional, if necessary.
• Check your thermostat setting. For every degree you turn your thermostat down, you can save 3 to 5 percent on your monthly heating costs. Turn your thermostat down to 65 degrees at night or if you're going to be away from your home for more than four hours.
• Change disposable furnace filters every 30 days or so. A good reminder is to change or clean your furnace filter on the day you receive your LG&E bill.
• Use draft stoppers at doors and windows.
• Wear layered or warmer clothing while indoors and put extra blankets on your bed.
• Close the dampers and doors in fireplaces when not in use, unless you have a gas fireplace.
• On sunny days, open drapes and blinds to allow the sunlight to brighten and warm rooms, close drapes and blinds at night to retain the heat.
• Turn down your water heater to a low or medium setting. Water heaters installed prior to 1990 may benefit from a water heater blanket or jacket (sold at hardware or home improvement stores for $10 to $15).

Customers should contact LG&E prior to their bill due date if they know they will not be able to pay their bill so the company can establish satisfactory payment arrangements.

To help customers cope with higher heating costs, LG&E will match dollar-for-dollar customer donations to the Community Winterhelp program that helps customers in financial crises pay their heating bills.

In 2004, the Community Winterhelp program raised more than $240,000 and served over 1,700 families in Louisville Metro. Since 1983, Winterhelp has raised over $4 million. Approximately $1 million of that has been donated by LG&E. The dollars raised have helped more than 23,000 families pay their heating bills over the years.

Residential customers may donate to Community Winterhelp by rounding their monthly utility bill up to the nearest dollar, by making a monthly pledge or through a one-time contribution. Community Winterhelp funds are distributed based on income; however, income guidelines are generally less restrictive than other programs. Donations are tax-deductible.

LG&E is also partnering with Project Warm to fund energy management workshops across Louisville Metro and the 15th annual "Project Warm Blitz," where hundreds of LG&E and Project Warm volunteers will winterize the homes of low-income seniors and disabled citizens.

For more information on energy-saving programs, heating tips, or available financial assistance, visit the LG&E website.

LG&E Energy LLC, headquartered in Louisville, Ky., is a diversified energy services company. LG&E Energy owns and operates Louisville Gas and Electric Company, a regulated utility that serves 318,000 natural gas and 390,000 electric customers in Louisville and 16 surrounding counties, and Kentucky Utilities Company, a regulated electric utility in Lexington, Ky., that serves 518,000 customers in 77 Kentucky counties and five counties in Virginia.