The Kentucky Public Service Commission has approved a rate increase for customers of a western Kentucky utility that sought the increase to absorb the loss of its biggest customer, an aluminum smelter.
The PSC authorized Big Rivers Electric Corp. to seek an additional $54.2 million annually from customers. The PSC says in a statement the authorization is about $20 million less than what Big Rivers requested.
The increase means the average customer's monthly bill will go up by about $17.
Three industries have filed notice that they intend to appeal a recent decision allowing Big Rivers Electric Corp. to increase rates.
Last month, the Kentucky Public Service Commission approved agreements allowing Century Aluminum - the utility's biggest customer - to leave the Big Rivers system and purchase power on the open market. That led Big Rivers to request a rate increase for its remaining 112,000 customers in western Kentucky.
The PSC hasn't approved the increase, but it did allow the utility to begin charging higher rates subject to refunding customers money if a smaller hike is approved.
The Gleaner reports that Kentucky Industrial Utility Customers filed the notice of appeal with Franklin Circuit Court on behalf of Kimberly Clark paper mill, Domtar paper mill and Aleris aluminum rolling mill.
An aluminum smelter in Hancock County will be supplied with electric power purchased on the open market under a plan announced Wednesday by the Kentucky Public Service Commission.
Century Aluminum of Hawesville says it needed the arrangement in order to remain open. The smelter employs 700 workers and has traditionally purchased power generated by Big Rivers Electric Corporation in Henderson. But Century officials say using electric power purchased on the open market by Kenergy Corporation will be much cheaper.
The PSC said in a statement that the plan tries to achieve a “delicate balance” between keeping the Hawesville smelter open and not imposing high costs on Big Rivers customers beyond those that would occur if Century Aluminum closed.
Members of the public who would be impacted by a potential rate increase by Big Rivers Electric Corporation have opportunities to speak out this week. The Kentucky Public Service Commission is holding meetings in Owensboro and Henderson, and a chance for Brandenburg residents to link via video conferencing.
The Henderson-based Big Rivers wants approval for a rate adjustment that will raise $74.5 million dollars in increased revenue. The possible 20 percent increase would account for an extra $24 per month for the average customer. Industrial customers would see nearly 17 percent rate increases.
The utility says most of that new revenue is needed to offset the loss of the Century Aluminum smelter in Hawesville, which will cease to be a Big Rivers client in mid-August. Big Rivers provides power to a region extending from Meade County through Owensboro and Henderson and into Paducah in far western Kentucky.
The Public Service Commission will hold two meetings this Thursday for public comments on the proposed rate hike. The first is at South Middle School in Henderson at 1 p.m., and the second will be at the Owensboro Community and Technical College that evening at 5:30.
Big Rivers customers in the Brandenburg area can watch the Owensboro meeting via a video-conference at Meade County High School starting at 6:30 p.m. eastern.
A coalition of western Kentucky businesses and residents has formed in hopes of minimizing the fallout of an electricity rates deal between Big Rivers Electric Co-Op and western Kentucky aluminum smelters.
The coalition is worried the deal will lead to higher utility bills for residents and businesses.
Aluminum prices have been low in the past few years, and across Kentucky, aluminum smelters have sought to save money on their electricity bills.
Earlier this year, Big Rivers cut a deal with two Western Kentucky smelters, allowing them to buy their electricity on the open market. The smelters said the change was necessary to stay in business, but the deal cost the electric company more than half of its customer base.
To make up for that, Big Rivers is asking the Kentucky Public Service Commission to approve a 30 percent rate increase for its remaining customers.