Energy Rates Editorial

An issue that has generated more Crittenden County contact with my office than most has been the issue of electric rates. Like many, I received a “robo call” from Kenergy telling me that Senate Bill 71 and House Bill 211 would increase my electric rates if passed. I was then urged to call my legislator and tell him or her to vote to oppose these bills. The good citizens of Crittenden County have responded to Kenergy’s request. On the surface the Kenergy request seems reasonable. However, Kenergy is only telling half the story. The other half is that rates will also go up if the bills do not pass. That’s righ… if the bill passes, rates will go up and if the bill doesn’t pass, rates will go up.

What is driving this is the fact that on August 12, 2012 Century Aluminum of Hawesville, KY, an aluminum smelter plant, gave a one year notice to Big Rivers Electric Corporation of Henderson, KY, an electric transmission company, that Century would no longer be purchasing power from Big Rivers. Century said that if it could not purchase power from the wholesale market it would close its plant. In response, on January 13, 2013, Big Rivers followed with a request to the Kentucky Public Service Commission for a rate increase that would amount to a little under $22 per month per household. Subsequently, Rio Tinto Alcan in Sebree, KY, another aluminum smelter, said it would close its doors because it could no longer afford the price of electricity.

The reason Kenergy is involved is because Kenergy, along with Jackson Purchase Electric and Meade County Rural Electric, is one of three equal owners of Big Rivers.

In last week’s Crittenden Press, a Public Notice was printed showing that Kenergy has petitioned the Kentucky Public Service Commission for a rate increase of 20%. This is on top of a 16% Kenergy rate increase not too long ago.

The reality is that this issue should not be before the Kentucky Legislature. It is an issue that Big Rivers, Century, and Alcan should solve on their own like grownups – not like little kids on the playground. I’ve had the opportunity to meet with the CEO of Kenergy, management of Big Rivers, and the General Counsel of Century and I not too gently told them to “put on their big boy pants and get to the negotiation table.” Fortunately, they’ve now done so, but a solution still hasn’t been reached.

I haven’t yet had the opportunity to talk to Alcan, but I do know that Big Rivers has been having some financial trouble and Century lost money last year. It is my feeling that we – you and I – are caught in the middle of a game of chicken and I personally don’t like it.

I am not taking sides on this because I hope that the negotiations are fruitful, and a legislative solution will not then be necessary. If the bills came to the House floor tomorrow, I’m not sure how I would vote because no matter what happens, jobs will be lost and our electric rates will increase.

Please don’t take everything you hear from Century and Big Rivers/Kenergy at face value. Both sides are “spinning” the facts to make the other side look bad. In my opinion, there are no “good guys” in this fight. I appreciate your interest and hearing from you. I ask that you work with me to keep the pressure on all parties to negotiate in good faith.