PADUCAH, Ky. (AP) - An electric provider in western Kentucky has a plan to relieve ratepayers of some of the state’s most expensive electric rates, but it won’t go into effect until next summer.
The plan approved by the Paducah Power System board Wednesday will hold a fee paid by customers at its current level and then lower it in July. The board plans to drop the fee, called a power cost adjustment, from a little over 2 cents per kilowatt hour to about a half-cent by July.
The current fee helps make Paducah Power electric bills some of Kentucky’s costliest, The Paducah Sun (https://bit.ly/1v8GpiX) reported.
The utility is saddled by debt from its investment in the Prairie State Energy Campus, a southwestern Illinois coal plant, which ended up costing about $4 billion to develop - twice the original estimate.
Mark Crisson, interim general manager at Paducah Power, said officials are even considering bankruptcy as an option.
“There’s been some talk about that. I just want to say we have been doing some ongoing research and due diligence to try and better understand that option and that process,” Crisson said Wednesday. “There’s a lot of uncertainty about what that would mean for a municipal organization like Paducah Power. We are looking at that.”
Crisson gave a presentation to the board that said low cash reserves and the power cost adjustment deficit triggered a recent negative rating watch by Fitch Ratings. The board said that deficit is projected to be $4.7 million by the end of June 2015.
The board approved hiring American Municipal Power as its portfolio manager beginning in 2015. That move is expected to save some $2 million in net power costs in the first half of 2015.
Paducah Power is also offering assistance to customers through free home energy checks, implementing a “round-up” program to help low-income customers and providing an updated customer bill format with more information.
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