HENDERSON, Ky. (WEHT) – The City of Henderson is set to sustain a big economic hit after a major electric company announces it’s leaving for the city of Owensboro. The move will cost Henderson almost 120 jobs.
Talks broke down last year on a possible sale of Henderson Municipal Power & Light to Big Rivers Electric.
Henderson leaders told Eyewitness News in December they’re already in the process of replacing the major hit to the city’s economy.
“Henderson Economic Development Corporation ran an economic analysis and says our move will cost them $70 million dollars a year to our community,” explained President and CEO of Big Rivers Electric Corp. Bob Berry.
A dispute between Big Rivers Electric and Henderson Municipal Power & Light began back in early 2019 when the parties couldn’t decide who should pay for cleanup of the Station Two Power Plant in Sebree.
“Big Rivers took 78 percent of capacity out of the plant over the life of the plant, the city took took 22 percent,” Berry said. “We think they should pay 22 percent and we pay 78 percent because that’s the amount of usage the two parties got out.”
HMPL officials say they disagree on the percentages of what they are responsible to pay for in regards to clean-up at the now closed power plant.
“It may not sound like a big deal where we say 15 percent, and they say 20 percent but depending on what you apply that to, it can be millions and millions of dollars,” said HMPL General Manager Chris Heimgartner. “The power market changed in 2015-2016 and a lot of the plants became uneconomic, even the newer one became uneconomic.”
Big Rivers Electric put two offers on the table – one in 2018 and the most recent in October of 2020 — both similar – they offered to buy HMP&L for $90 million and pay Henderson an annual $2.5 million franchise fee.
However, in the middle of negotiations with businessmen and leaders – HMPL says Big Rivers Electric had a different plan.
Five Henderson businessmen who wanted the electric company to stay in the city were brought in in an attempt to let both sides negotiate fairly – but it ultimately failed.
“Big Rivers out of the blue sent a term sheet, I guess you would put, they would probably characterize it as an offer letter, but it was a term sheet and they sent it out of the blue to the city,” Heimgartner said.
But Big Rivers Electric officials say they tried working with the city. Berry said Mayor Steve Austin called him after the October 2020 offer and told him he was excited about the news. Berry said Mayor Austin called back days later and said they needed to slow down on the possible deal to buy HMP&L.
“When one company buys another, you start out a term sheet with a price and then you negotiate the definitive agreement that gives the finite details in the end,” Berry said.
HMP&L officials say there are many factors that played a role in making Big Rivers Electric move out of the city.
“If they can tell you in thirty seconds what they think the problem is, they are really glossing over the problem,” Heimgartner said. “HMP&L is not on the market, that was not the purpose behind it all.”
HMPL says it is weighing all options — but says it remains committed to operating in Henderson.
(This story was originally published on January 6, 2021)