Business
11:24 am
Fri May 17, 2013

Coalition Forms to Oppose Electricity Rate Increase in Western Kentucky from Smelter Deal

Credit Big Rivers

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% rate increase for its remaining customers.

That prompted the creation of the Fair Rates Kentucky coalition.

"Big Rivers needs to abandon the plan to raise rates," argues Steve Henry, a coalition member and general Manager of Domtar, a paper company in Hawesville. "Otherwise, more businesses and residents could leave the company's service area.

"You know, we just need to think about what these rate increases will do to area businesses, which obviously employ many of the 110,000 residential customers that will be affected by these increases as well. Think about the schools, churches, hospitals," Henry said.

Henry said Big Rivers needs to look at all options and back off the proposed increase.

He argued that Big Rivers is misguided in seeking the increase.

"They are hoping business conditions will improve four or five years down the road and in the meantime ask us to pay the exorbitant price increases until they hope that the markets improve down the road," Henry said.