The Weather Normalization Adjustment is a method of adjusting customers' bills to reflect normal, rather than actual, weather conditions during the months of November through April. The WNA has a leveling effect on customers' gas bills by reducing bills in months with colder-than-normal temperatures when customers' gas usage tends to be higher and increasing bills in months with warmer-than-normal temperatures when customers' gas usage tends to be lower. As a result, customers are less impacted by large monthly swings in their gas bills which can occur during the heating season as a result of increased usage during colder weather.

No. WNAs have proven to work extremely well for customers and utilities throughout the U.S. Many other states have approved weather normalization plans; the use of weather adjustments has grown substantially in the past 20 years.

No. The Kentucky Public Service Commission (KPSC) approved the Weather Normalization Adjustment in 2000 for an experimental period. At that time, LG&E calculated the Weather Normalization Adjustment as part of the customer's distribution charge. In July, the KPSC approved the permanent use of the Weather Normalization Adjustment and LG&E has taken steps to include it as a separate line item on customers' bills.

The WNA is designed to help the Company maintain a consistent revenue stream during the winter months while benefiting the customers by lowering bills when the weather is colder-than-normal and reflecting a surcharge only when the weather is warmer-than-normal. The calculations used by LG&E to determine whether the WNA is a credit or surcharge in any given month are based on the method and data approved by the KPSC.

Certainly not. LG&E periodically files with the Kentucky Public Service Commission for a base rate increase to cover the rising costs of doing business. In a formal base rate case, the KPSC sets LG&E's gas distribution charge based on volumes adjusted to reflect normal weather. Without the WNA, LG&E would only recover its fixed costs if the actual weather was normal.

The WNA factor is based on individual customer usage and weather conditions during each billing period, as well as 20-year historical data to calculate the "normal" temperature. Weather conditions that are colder than normal will result in a WNA that is a credit on the bill. Warmer-than-normal weather conditions will result in a surcharge on the bill.

No. WNA is applied to LG&E natural gas customers' bills only during the winter months (November through April) when customers' bills are most sensitive to increased usage as a result of colder temperatures. During the remainder of the year, bills are computed based on actual usage with no adjustment for weather.

The WNA calculation uses several variables, including the customer's premise-specific base load (recalculated annually) based on usage during the July and August preceding the start of the WNA season. Therefore, the WNA line item on this month's bill reflects a calculation based on your usage during July and August 2009, as well as heating degree days and historical weather data for the past 20-years applied to this month's usage.

The WNA provides weather-sensitive customers with relief during extremely cold weather and the company with the revenue it needs to recoup fixed costs associated with meter reading, maintenance, postage and safety. Some of the fixed costs associated with these expenses are recovered through the distribution charge; however, the WNA allows us to quickly recover any revenue shortfall resulting from unseasonably warm temperatures during the winter. Likewise, it allows LG&E to quickly pass along to customers any excess revenue resulting from unseasonably colder temperatures.

Certainly. The following table offers a definition of the terms used when discussing WNA.

TERM	DEFINITION
WNA	Weather Normalization Adjustment
Base Load	The average premise-specific consumption for each customer during July and August prior to the Weather Normalization Adjustment season (November through April).
Commodity Price	The amount charged by the suppliers for the natural gas LG&E purchases for its customers. These costs are passed through to customers on a dollar-for-dollar basis without any mark-up by LG&E.
CCF	Hundred cubic feet (term used in conjunction with the amount of natural gas used). For comparison purposes, a typical average for an LG&E customer is 70 Ccf per month — or 7,000 cubic feet.
Normal Weather	Determined based on the number of heating degree days for the 20-year period used in LG&E's most recent base rate case.
WNA Credit	An amount credited to customers' bills when actual temperatures are colder-than-normal months.
WNA Surcharge	An amount collected from customers when actual temperatures are warmer-than-normal.