Big Rivers Rate Increases: Dismiss the Myths, Focus on the Facts
Since the beginning of their negotiations with the Kentucky Public Service Commission regarding two significant electric rate increases, Big Rivers has again and again presented misleading information regarding their intent and the impact of these increases on customers. Recently, in an editorial in the Owensboro Messenger-Inquirer, Big Rivers’ CEO Mark Bailey, continued to tout these myths. Below, Fair Rates Kentucky has decoded them and presented instead, the facts.
Myth: Big Rivers' philosophy and business ethics do not include harming others to advantage themselves.
Fact: Big Rivers has proposed a permanent rate increase that could result in residents paying nearly $900 more on average per year while manufacturers see their rates increase 105%. These rate increases seem pretty harmful to customers. Based on the current U.S. Energy Administration rate information, residential rates in the Big Rivers coverage area will be among the highest in Kentucky after the impact of the second increase is felt.
Myth: Big Rivers is a not-for-profit while local industry is trying to increase their profit.
Fact: Big Rivers is a not-for-profit, yet they made $8.9 million in profit margin last year. Additionally, Big Rivers made $24.2 million in profit through November before one-time downsizing costs, plus other nonrecurring expenses were included in December. Meanwhile, local industry is potentially experiencing a 105% increase while residents see their bills increase $900/year.
Myth: Big Rivers has done everything it can to be upfront, transparent, and mindful of our members and their retail customers.
Fact: Throughout this entire process, Big Rivers has been very selective in how they present the rate increase information to the public. They only share the base rate increase and never the cumulative impact. The average Big Rivers customer will see their total bill increase nearly $900 per year.
Myth: The revenue shortfall caused by the smelters' departures can only be made up through the rate increases Big Rivers has proposed.
Fact: In the first rate case, Big Rivers stated they needed every penny to avoid bankruptcy. The final order from the PSC was $20 million less than their request. In the second rate case, Big Rivers is again stating they need every penny of the increase to avoid bankruptcy. KIUC is advocating a small, reasonable increase combined with Big River’s use of the reserve fund in order to give Big Rivers more time to implement their load mitigation plan. Big Rivers states they need all of the increase now and hope to reduce rates later.
Myth: Large industrials want to rework a reserve fund “by siphoning millions of dollars” from residents and businesses.
Fact: KIUC has proposed treating all business customers equally with regards to the rural reserve fund. The proposal ensures that residents will see the exact same benefit – with or without the KIUC proposal. The proposal addresses a fairness issue where some businesses participate, but large industrials do not. The Attorney General’s office favors treating all business customers equally.
Fair Rates Kentucky is committed to stopping these rates increases but WE CAN’T DO IT WITHOUT YOU! Here are some other ways you can help:
1. Go to the TAKE ACTIONtab and let your elected leaders know that you oppose Big Rivers’ unnecessary rate increases before it’s too late! 2. Write a letter to editor opposing these rate increases and submit it to your local newspaper! 3. Share this message with your friends and family around the region!