"THEN YOU CAN TELL ME GOOD-BY" casinos

Kiss me each morning for fifty years costing me millions more"

You have to wonder how long before the wheels come off completely?

Simple fact whether you purchased 30% or 300% of power from PSEC your in  for an expensive ride.

As you read the article take note of the 1936 exemption. As I read more and more about AMP-OHIO and PSEC I learned that no Municipality Electric System in Pennsylvania bought into this scheme. Maybe their smarter than the rest of us? Or maybe by state law they are regulated enough not to get involved in ideas like this.

The Courier-Journal |     Thursday, 19 February 2015

 

Bundling up in Paducah

While people in Paducah bundle up in Snuggies as temperatures plummet and power bills skyrocket, political leaders in Kentucky need to rethink the wisdom of letting municipal power providers operate outside of state consumer protections.

The Kentucky General Assembly in 1936 exempted municipally-run operations like Paducah Power System from rules under the Kentucky Public Service Commission. That helped allow the terrible predicament in which Paducah, along with Princeton, find themselves, Together, a decade ago, the western Kentucky communities bought hook, line and sinker what Peabody Energy was selling: a coal mine with lousy coal, and a boondoggle of a power plant that cost twice as much as planned and hasn’t run very well.

Paducah, Princeton and dozens of other communities across the Midwest, in fact, gambled and bought into the Prairie State Energy Campus in southern Illinois, and are now paying the price.

As The Courier-Journal reported on Sunday, some Paducah business leaders fear their rising electricity rates and $555 million in long-term debt (about $25,000 per customer) are hammering the local economy.

Paducah customers’ bills are now 60 percent higher than those of customers of the state’s four main investor- owned, regulated utilities.

“I can’t imagine a bigger mistake that was made,” said Paducah businessman Ronnie Goode, owner of Cole Lumber Co.

“People are going to bed cold because they can’t afford to turn the heat up,” added Princeton businessman Don Hancock. He closed his Princeton grocery store last year because, he said, his power bills went up $5,000 per month.

The PSC isn’t perfect. But at least PCS requirements make sure there’s a thorough vetting of economics and needs, when utilities make decisions as consequential as thosemade in Paducah and Princeton, which ended long-term ties with the Tennessee Valley Authority to buy into Prairie State.

Theirs is a cautionary tale for nine other municipal power providers in Kentucky that are looking for a new source of electricity on the open market: Frankfort, Berea, Barbourville, Bardwell, Corbin, Falmouth, Madisonville, Paris and Providence.

It’s buyer beware.

The mess has a significant Hoosier angle, too. Indiana Municipal Power Agency, which powers 59 communities including Scottsburg and Paoli, has a 12.6 percent ownership share of Prairie State. And it’s now being sued by residents of an Illinois community who claim IMPA misled their community into investing in Prairie State, when it was serving as a consultant to that town’s power provider.

That really is the issue: Were these communities duped? Paducah officials blame the recession and falling natural gas prices, which makes their coal commitments much more costly.

Still, somebody needs to get to the bottom of this. The Securities and Exchange Commission has issued some subpoenas, including one to Peabody and one to IMPA, so maybe that may lead to something.

Paducah attorney Mark Bryant is looking into whether residents or the city can sue Peabody, which somehow escaped with just a 5 percent ownership in Prairie State. That lawsuit should be thoroughly investigated.

The Paducah Power System just hired a new general manager, Gary Zheng. He can give the city a fresh chance to examine all the options. That includes filing for bankruptcy to leverage debt relief from bondholders, and giving customers more weatherization help to make sure they aren’t freezing to death because of management mistakes.

After placing a bad bet on coal, these communities need some new hands to play. And maybe a new deck of cards.