Big Rivers Customers Can Expect Another Rate Increase, As Sebree Smelter Opts Out of Contract
The Big Rivers Electric Corp. will be forced to raise rates again for its 113,000 customers, as a second western Kentucky aluminum smelter has reached an agreement to purchase its electricity on the free market.
Big Rivers, Century Aluminum and power distributor Kenergy have finalized and filed an agreement with the Kentucky Public Service Commission for a new power arrangement for Century’s aluminum smelter in Sebree.
Century says the move was necessary to remain open. A similar agreement was reached in August for Century’s smelter in Hawesville. Together, these contracts accounted for $360 million dollars a year, or 65 percent of not-for-profit cooperative Big Rivers’ income.
Big Rivers communications director Marty Littrel says the only way to fix the deficiency is to cut costs and raise rates.
“It’s unfortunate, it's painful," Littrel said. "As a result, we’re going to be idling some power plants. That means you won’t be buying as much coal, and you won’t need all the workers. So that means layoffs.”
Losing the Hawesville smelter resulted in a 15.5 percent increase for Big Rivers’ customers.
Littrel said that Big Rivers does have some reserve funds to keep the second rate increase from impacting residential and rural customers until 2015.
Big Rivers will have a rate hearing with the Public Service Comission on Jan. 7.