Ideas for rate relief from another city facing high power bills

Paducah Power customers pay one of the highest rates in the state for energy. It’s an issue we’ve been tracking since last winter, when residents and business owners started getting bills two and three times bigger than expected.

The problem boils down to a decision Paducah Power board members made to invest in a new, coal-fired power plant in 2005. Now, Paducah Power System gets the majority of the city’s energy from The Prairie State Energy Campus in southern Illinois, but the business deal hasn’t worked out like they thought it would.

Mayor Galye Kaler has described the cost of energy as the biggest problem facing the city since the great flood, but Paducah isn’t the only town looking for ways to fix the Prairie State problem.

400 miles north of Paducah, you’ll find Batavia, Illinois. It’s “The City of Energy.” The small town of 26,000 was famous for windmill production, but today it’s known for having high power rates. Like Paducah Power, the city buys energy from Prairie State.

Joe Marconi is a businessman who lives in Batavia. He said, “I would say it’s making it very difficult for people.” He lives on top of a six-room antique store and boutique. “My business was going south a little bit, and all of my expenses were going north.”

Breaking down the cost, Marconi pays just under 12 cents a kilowatt hour to keep the antique lights on. In Paducah, the rate is over 13 cents. Batavia’s Department of Public Works runs the city’s utilities. City Administrator Bill McGrath said that’s given them more options for relief. He said, “I’m sure we’re like several other cities under this kind of stress, looking at all sorts of different ways to deal with this.”

Batavia’s City Council passed a local option sales tax increase. This extra money, mostly coming from tourists, is used to level off power costs and keep the rate competitive. “You can see that the city is doing quite a bit,” Marconi said, but he still doesn’t think it’s enough. He is one of eight people involved in a class-action lawsuit alleging the city was misled when they invested in Prairie State.

Attorney Michael Childress filed the complaint to get rate-payers in Batavia a rate break. He said, “When we looked at the promise compared to what was delivered, we became concerned because they were so different.” He also said, “What they’re getting is over-market energy, and they shouldn’t have to bear the cost of that.”

That’s the sentiment shared in Paducah, where attorney Mark Bryant is also working to find out if Paducah Power System was misled. He said, “We’re going through every one of the documents with a fine-toothed comb.” Kentucky law prevents rate-payers from taking legal action. Bryant said he could only sue on behalf of the Paducah Power board and with their permission. He said, “If we file a lawsuit and we win, we have a really good shot at getting the money back for everybody.”

Bryant said Paducah is getting ahead of the game. The Paducah Power System board released documents and information to him that Childress is still trying to get by using the lawsuit.

The law in Kentucky does not allow for city officials to amend the sales tax rate.

The class-action law suit filed over Batavia’s energy deal with Prairie State has been delayed, but Childress said he expects to have a decision by December.

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