Environmental Cost Recovery Mechanism Issues. The Parties agree that, effective as of the first expense month after the Commission approves this Settlement Agreement, the return on equity that shall apply to the Utilities’ recovery under their environmental cost recovery (“ECR”) mechanism is 10.25% for their 2009 and 2011 environmental compliance plans. The Parties further agree that all costs associated with KU’s and LG&E’s 2005 and 2006 environmental compliance plans, excepting the Emission Allowance Projects discussed in Xxxxxx X. Xxxxxx’x testimony in both Rate Proceedings (KU Project 22 and LG&E Project 17), shall be incorporated into and recovered through the Utilities’ base rates and will be removed from the Utilities’ monthly environmental surcharge filings effective as of the first expense month after the Commission approves this Settlement Agreement.
