Big rate hike looms for J.P. Energy users
Mar 19, 2013 | 2249 views | 0 0 comments | 37 37 recommendations | email to a friend | print
By Alan Reed

Tribune-Courier News Editor

Jackson Purchase Energy customers may soon see a major increase in power bills.

John Van Mol, spokesman for Jackson Purchase, said bills for residential customers may increase by 71 cents per day.

The rate hike is not yet official as it has not been approved by the Kentucky Public Service Commission.

“It’s because Big Rivers Energy, Jackson Purchase’s producer and supplier, has placed a big rate increase on Jackson Purchase,” Van Mol said.

“We have to pass the expense on to our customers. There is no extra margin in our budget to compensate for the increase.”

Van Mol said Jackson Purchase would likely not consider a change in wholesale power suppliers because it is one of three rural electric cooperatives to own Big Rivers Energy.

He added Big Rivers board of directors is comprised of executives from the three cooperatives, and would consider mothballing power plants and other steps to reduce costs.

“Big Rivers has two large aluminum smelters as customers that account for 70 percent of production,” Van Mol said. “Both of these companies have given notice they will be getting out of their contracts.”

Jackson Purchase has made an intervention with Big Rivers to control costs, Van Mol said. The intention is to prevent Big Rivers from wasting money.

“We’re doing what we can at Jackson Purchase to hold down costs,” Van Mol said. “We have 10 percent fewer employees and have cut back on travel. We want to do the best we can in a tough situation.”

Van Mol said the rate hikes would affect all customers, including residential, commercial and industrial.

A public hearing is scheduled on April 9 at 9 a.m. central time at the office of the Kentucky Public Service Commission, 211 Sower Blvd., Frankfort, to examine Jackson Purchase’s Fuel Adjustment Clause.

Mark Fisk, general manager of Benton Electric, said his utility buys electricity from the Tennessee Valley Authority. According to a TVA website, West Kentucky Rural Electric, Marshall County’s other electric distributor also buys its electricity from the TVA.

“The TVA has not announced any increases,” Fisk said. “They had a new CEO come onboard. In July, distributors are going to meet with him to discuss how things are going. There could be an increase in october, but not 20 percent. I really don’t see an increase on the horizon.”

Fisk said TVA power is slightly more expensive than Big Rivers due to some upgrades in the system.

“With Big Rivers losing those metal industries, they will overshoot us pretty good,” Fisk said.

Jamie Sears, communications director for West Kentucky Rural Electric, says WKRECC has not passed along an increase to customers since 2009 and has no plans for an increase this year.
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