Local JPEC customers face huge rate hikes

(Filed June 6, 2013) The Kentucky Public Service Commission (PSC) will offer opportunities next week for members of the public to provide comments on a request by Big Rivers Electric Corp. to increase rates. The rate increase will be passed along to one western Kentucky utility Jackson Purchase Electric Corporation. JPEC will pass along the rate increase to its customers.

The rate increase is the result of a loss of one large industrial customer Century Aluminum Co. Big Rivers Electric Corp is also expected to lose a second large customer Rio Tinto Alcan an aluminum smelter that is scheduled to be closed. Big Rivers has filed a second request for increase in its rates in a separate petition because of the closure of that plant. That request, if approved could result in yet another rate increase.

A public meeting will be held on the afternoon of Thursday, June 13 in Henderson, followed that evening by a video conference linking a public meeting in Owensboro with sites in Paducah and Brandenburg.

Both sessions will begin with a presentation by PSC staff on the regulatory processes governing the case and an overview of the Big Rivers proposal.

Big Rivers is seeking approval to adjust rates to increase adjusted annual revenue by $74.5 million. Of that amount, $63 million is to partly offset the loss of revenue that will occur when the Century Aluminum Co. smelter in Hawesville ceases to be a customer in mid-August. Century Aluminum consumes about 40 percent of the power generated by Big Rivers, and a slightly larger share of total revenue.

The remaining portion of the $74.5 million is needed for Big Rivers to maintain financial stability and meet its debt obligations, the utility says.

In its application, Big Rivers estimates that the rate changes will increase average monthly residential bills by about $24 per month, or about 19 percent. Large industrial customers would see rates go up about 17 percent, the utility says.

The current case does not take into consideration the impending loss of Big Rivers’ second-largest customer, the Rio Tinto Alcan aluminum smelter in Sebree, which is being purchased by Century Aluminum. It uses about one-fourth of the power Big Rivers produces and has announced its intention to close in January.

Big Rivers has file notice of a second request for rate adjustment to account for the loss of the Alcan revenue.

For those unable to attend the meetings, the informational presentation will be made available on the PSC website, psc.ky.gov, on the morning of June 13. A video recording of the meetings also will be available on the website.

       The public meetings are scheduled for:

Thursday, June 13, 2013, 1 p.m. CDT
Auditorium, South Middle School
800 South Alves St. 

Thursday, June 13, 2013, 5:30 p.m. CDT
Room 107, Advanced Technology Center
Owensboro Community & Technical College
4800 New Hartford Road

Thursday, June 13, 2013, 5:30 p.m. CDT
Crounse Hall Room 228
West Kentucky Community & Technical College
4810 Alben Barkley Drive

Thursday, June 13, 2013, 6:30 p.m. EDT
Auditorium, Meade County High School
938 Old State Road