“A decade ago, Paducah was told it could look forward to many years of affordable power.
A Paducah Sun story on Jan. 26, 2005, reported the good news: ‘…becoming a partner in the construction of a new power plant in southern Illinois will mean lower costs over the next 25 to 30 years, according to PPS Chairman Ray McLennan.’
The story went on to quote McLennan, who still chairs the Paducah Power System Board, saying that investing in the new plant ‘will provide an immediate savings of at least 10 percent annually and even more in future years.’
A man with that kind of vision badly needs new glasses. He also needs to be replaced, along with his fellow board members.
Paducah’s 30-year investment in the under-performing Prairie State Energy Campus has cost Paducah dearly and stuck the town with what appear to be the highest electric rates in Kentucky.
And the rates here aren’t just a little higher, they are miles higher.
We published a chart last month showing that a monthly residential bill for 1,000 kilowatt hours from Paducah Power cost residents $147.78.
That’s 47 percent higher than what customers of Louisville Gas & Electric would pay ($100.16); 55 percent higher than Jackson Purchase ($95.58); 57 percent higher than Kentucky Utilities ($94.29); and 89 percent higher than Henderson ($78.12).
Imagine for a moment if Paducah’s City Commission made a decision that jacked up the city’s property tax rate that far above other towns. Think those commissioners would keep their seats?
The impact of the PPS board’s misplaced confidence in Prairie State has been jarring, not just in terms of the inflated bills consumers have to pay but also in terms of economic growth and the financial health of existing businesses.
One striking example:
An executive with Banks Grocery Co., which has stores on Lone Oak Road and Jackson Street spent some time putting together a comparison of what his Paducah Power bills have been for the past eight months vs. what neighboring Jackson Purchase Energy would have charged.
The Paducah Power bills total $186,134. Using Jackson Purchase rates, confirmed by the utility, the same bills would have totaled $82,051.
That’s a budget-busting difference of $104,083 so far this year.
What company with any significant need for power wants to locate or expand in a city with the state’s highest electric rates? Yes, prospective firms are offered a lower rate for five years, but wouldn’t they ask what happens then?
I’ve spoken with several people knowledgeable about the decision 10 years ago to leave TVA and invest in Prairie State, including two who served on the PPS board at the time. They say that given energy market conditions and other facts they had at that time, plus the glowing assurances from Peabody Energy about the Prairie State plant, it was a rational move.
Not everyone agrees, but even if it seemed to make sense then, it doesn’t now.
In addition to the board’s accountability for today’s expensive bills, there’s a second and more pragmatic reason its members need to go that relates to the Kentucky Attorney General’s Office.
Given the unrealized avowals that the Prairie State investment would lead to reliable power at lower rates, it’s reasonable to wonder whether Paducah was misinformed and misled by Peabody Energy, which built and marketed the plant.
The best way to find out would be to ask the AG’s Office to get involved. It could issue what’s called a civil investigative demand for relevant documents. Depending on what turns up, a fraud suit or other civil litigation could follow.
Attorney General Jack Conway was in town last week, and I asked if he was inclined to step into the matter. While he wouldn’t talk about a possible investigation, he made it clear that he’s up to speed on the issues, including possible misrepresentation.
When I handed him a copy of our recent editorial (‘BILKED? Legitimate question exists on whether PPS was misled’) he said he had already read it.
Conway seems plenty interested, but he can’t act unless he is asked by the PPS board. That should have happened months ago, but no request has been made, which is another reason to clean house. If the members won’t resign, the mayor has authority to remove them and should use it.
The City Commission plans to hear from both defenders and critics of Paducah Power at its Sept. 23 meeting. It figures to be a lively session that should be catalyst for action.
This town has acquiesced long enough. It’s time to explore any potential avenue of relief.”
By Steve Wilson, Paducah Sun
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