LEXINGTON, Ky. — Mayor Linda Gorton offered public comment on Oct. 13 before the Kentucky Public Service Commission opposing Kentucky American Water Company's request for higher rates, according to a release from the Lexington Mayor's Office. The mayor's release said the utility "is not serving the people of Lexington well." The hearing took place in Frankfort, where the commission is headquartered.

The utility is asking regulators for a nearly 16% increase for residential customers, along with higher rates for commercial and industrial accounts, according to WEKU's report. The average residential customer now pays $51.60 a month, and that figure would climb to nearly $60 if the full increase is approved, with new rates taking effect in mid-December. The company has said the increase is needed to support more than $100 million in water system investments.

Gorton said in the release that the company has filed three rate cases in three years, the latest less than 12 months after the previous one, and that the average residential bill has already risen more than 60% since she took office in 2019. The release said that figure would exceed 86% if the requested rates are granted. The commission approved a rate increase in December 2025 that added $6.82 a month for a typical customer, according to WKYT.

The mayor also tied the rate request to a complaint the city filed with the commission in late August over the company's construction work. The release said that on Monday the commission rejected that complaint but allowed the city to file an additional response. The PSC said the filing did not connect the alleged problems to water service, and it gave the city 20 days to refile. Kentucky American spokeswoman Susan Lancho said the company agrees with the dismissal. The city said it is reviewing the order and will file a response.

The city's 17-page complaint, filed Aug. 28, accuses the utility of two years of unreasonable construction practices on city streets. It describes permit fees that are reassessed every 21 days when projects run late, and says the company has incurred nearly $270,000 in such fees since 2019. The Mayor's Office said the construction problems have kept Lexington streets torn up through the summer.

Gorton said she supports the company's need to replace aging pipes but opposes a proposed System Improvement Plan surcharge. In her view, the surcharge would lead to more construction and worsen problems the city already faces. She asked the commission to reject the increase, order the company to follow written construction policies, improve communication with local government and the public, and bar recovery of costs tied to construction practices the city considers unreasonable. She also suggested the commission could address the matter through the city's complaint or by ordering a management audit of the company's construction operations.

The dispute has also become a campaign issue. Gorton and her challenger, Raquel Carter, exchanged criticism over the utility after the complaint was filed. The city has been a party to past rate fights as well; in 2024, the Lexington-Fayette Urban County Government and the state Attorney General jointly challenged a proposed increase, and the commission trimmed it and ordered refunds.