Paducah Power System customers aren’t likely to see a rate change until July 2015 now that the utility board has approved a plan to handle its increasing rates and debt.
Board members signed off on Interim General Manager Mark Crisson’s plan yesterday. It aims to bring the Power Cost Adjustment, or PCA, down from more than 2 cents per kilowatt hour to almost half a cent for fiscal year 2016.
It also proposes using a surety bond to free up the Kentucky Municipal Power Agency debt service reserve funds. That money would then be used to pay down debt for up to four years while still giving bondholders security.
Since debt service is currently more than 55 percent of KMPA’s expenses, reducing it could bring down the rates customers pay.
As of September the PCA deficit sat above $3 million and could reach $4.7 million if no action is taken. If changes aren’t made, bondholders could take legal action forcing a rate increase.
