Madisonville Considering Split from KU Contract

Published 04/17 2014 05:58PM

Updated 04/17 2014 06:11PM

Two aluminum smelters did it last year, and now, several Kentucky cities, including one in the Tri-State could do it too: end their contract with a major power supplier.

The city of Madisonville is looking to quit doing business with Kentucky Utilities.  The reason: changes in their contract that could stick residents with bigger bills.  

The city of Madisonville is looking to turn out the lights on a future deal with Kentucky Utilities.

"We think this is arbitrary."

City officials say KU's new contract calls for a ten year agreement versus the five previously in place.

KU provides power to 12 towns, a group known as Kentucky Municpals. Leaders in several other communities say they too are looking into other companies.

"it's very disturbing when you try to hold the line on rate increases and something like this occurred."

City Elecrtic Supervisor Jim Asbury says the changes would kick in April 23rd.

"For example, if it went up $10 million and our share would be $1.7 million, that means we would have to put in a rate increase," he says.

Asbury couldn't say how much that means to the average household.  Chris Whelan of KU says changes put them in line with other companies nationwide.  And extra revenue is needed to pay for facility upgrades to meet federal environmental regulations.

"We're currently in the process of spending about $3 billion to upgrade environmental controls to a coal powered plant," she says. “We're also building a natural gas turbine here in Louisville that will supply KU customers as well."

Asbury says they haven't decided whether to go to the open market for power if they do end their contract.  He adds it could be several years if it happens.

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