Indeed, a recent 17% PSC-approved increase in rates from an eastern Kentucky electric utility and the ensuing public outcry caused Appalachian legislators to sponsor SB151. Make no mistake, however, that it's a bad bill. First of all, and even Senator sponsor Ray Jones has admitted, electing the PSC board will not guarantee lower power rates for anyone. Utility costs are heavily driven by personnel, technology and natural resources. Those factors are simply not going to decrease. I don't believe anyone believes the highly-trained men and women working to restore electrical service to our homes and businesses at 2 a.m. following a Kentucky thunderstorm should or would work for minimum wage. While SB151 supporters are hoping to curry political favor with eastern Kentucky voters, western Kentucky has much to lose. About 20% of the world's aluminum is smelted by producers in western Kentucky, and the process uses extreme amounts of electricity. Big Rivers Electric, based in Henderson, operates the power plants that provide that power. The financial markets where Big Rivers would go to borrow large sums of money to fund improvements to their systems consider elected PSCs to be more "volatile." That, in turn, could lead to higher borrowing costs for Big Rivers and others. That would lead to higher rates for electric consumers, including the aluminum smelters and their thousands of good-paying jobs. The smelters, due to intense foreign competition, will be in danger of leaving the state if such a scenario becomes reality. If the smelters are gone, all residential and commercial customers will see rate increases.
Overshadowing all is the fact that Kentucky's No. 1 economic development advantage has always been its low power rates. Why mess with that? Why become one of only 13 states with an elected PSC, all of which have higher power rates than Kentucky?
SB151 is a bad bill.
