Big Rivers Electric’s decision to let Century Aluminum out of its contract in August, may mean significant electric rate increases throughout the region.
Big Rivers spokesperson Marty Littrel said the aluminum smelter will be able to buy electricity elsewhere on the open market. But since the smelter is Big Rivers’ biggest customer, Littrel said the power supplier has to raise rates about 20 percent.
“All we’re trying to do is cover our expenses here,” he said. “We’ll likely have to idle a plant because this is a huge revenue loss for us.”
The aluminum smelter has been in negotiations with Big Rivers for more than a year. Century said it needed needed lower electric rates to keep the smelter running. Littrel said the issue has more to do with rising aluminum prices than it does with electric rates.
However, Century said it would close in August if no agreement was settled with Big Rivers. The smelter employs about 700 workers.
Littrel said Big Rivers has no motive to raise rates other than keeping the plant running.
“We have no shareholders," he said. "We have no motive to earn unnecessary profits. So when we ask for a rate increase it’s only to cover our costs to provide electricity for the people of Kentucky.”
The rate change is waiting approval from the Public Service Commission, and Littrel said it could take effect as early as September.
Big Rivers sells electricity to Jackson Purchase Energy, Kenergy and Meade County Rural Electric.
