Monticello voters will make an important decision when they go to the
polls November 6, and a meeting planned for Thursday evening is geared to
help them better understand that choice.
South Kentucky RECC and the Monticello Electric Plant Board are hosting
a public forum regarding the proposed sale of the Plant Board to the RECC.
It will be held at Memorial Park and will begin at 5:30 p.m.
It's a proposal that has already been approved by the Electric Plant
Board and by the City of Monticello. But the final say goes to the people of
Monticello when they cast their ballot.
"We want to invite everyone to come out and take part in this. There
will be a free meal provided for those who attend," said Monticello Mayor
Kenneth Catron. "We will put the facts out there and the people can make up
their own minds."
Catron noted that originally officials thought that only voters who were
customers of the Electric Plant Board would be able to vote on the issue.
But he said that all registered voters in the City of Monticello will
ultimately make this decision.
"I think this is a very positive thing," stated Catron. "There has not
been a tax increase in at least 15 years in the city, and this will provide
a steady income for the city over a 30 year period, and we won't have to
raise taxes for many years."
South Kentucky RECC has agreed to pay $4,686,000 for the Monticello
Electric Plant Board, with $86,000 of that earmarked to pay membership fees
for existing city customers. Initially, RECC will pay the city $200,000 and
then will make an annual payment of $146,666 over the next 30 years. Twenty
percent of that annual payment will be earmarked for economic development,
according to details that have been announced regarding the proposed sale.
The proposal from South Kentucky RECC came after the Electric Plant
Board decided to discontinue its contract to receive power from the
Tennessee Valley Authority (TVA). The Electric Plant Board sought proposals
for alternative sources of power for its customers.
In January, the Electric Plant Board voted unanimously in favor of the
sale. The City Council also approved it in January, and that action sent the
proposal to the November ballot.
Allen Anderson, CEO of South Kentucky RECC, said that everyone involved
with the proposed acquisition has spent a great deal of time in careful
consideration of it.
"We talked and considered this for quite some time before we started
pursuing it in earnest," said Anderson. "There are just so many obvious
synergies to be gained by this acquisition. When Gary Dishman, Monticello
Electric Plant Board Superintendent, and I first started having these talks,
we said for this to work it had to be a win-win for everyone involved‹their
customers and our member-owners and their employees and our employees.
All of the plant board directors, management, city council, mayor and
the RECC, its management team and board along with many consultants have
spent hours on top of hours looking at every possible long-term answer for
what was best for all parties involved."
Anderson said that it always came back to the fact that RECC is the best
deal as a long-term provider for Electric Plant Board customers.
"We know this is a lot to absorb, but we hope the people can trust the
judgment of all these different parties," said Anderson. "We want
Monti-cello Electric Plant Board customers to feel free to ask any questions
that they may have concerns about, and they will find that we will be
perfectly honest and open, because it truly is a once-in-a-lifetime
opportunity. It may never be feasible to look at this option again. At the
present time, everything lines up to be an advantage for all parties
Anderson said that he understands that rates are a concern for customers
of the Electric Plant Board, but he said for the long-term, South Kentucky
RECC will be the best choice.
"When this process first began two-plus years ago, South Kentucky RECC's
rates were cheaper across the board. We had our first rate increase in 17
years during this time, and our power provider East Kentucky Power (EKPC)
also had a rate increase, their first in more than 20 years, which moved our
rates ahead of TVA's," said Anderson. "My prediction is that Electric Plant
Board customers will see a change in TVA's rates before you ever see another
one in our rates. I honestly feel that come January 2009, our rates will be
very competitive and possibly even lower based on future projections. EKPC
has two new coal-fired generation plants in the process of coming online,
the first of which will be in 2009, which will replace higher cost purchased
power and gas-fired generation helping to lower overall costs."
"The whole point here is if South Kentucky RECC is successful in
November, the rates for Electric Plant Board customers will remain the same
until January 2009," Anderson continued. "At that point in time, with the
co-op, there is a guaranteed source of power through East Kentucky and that
rate to the member would be the same as what we charge all of our members in
our 13 county area including Wayne County. However, between now and then, we
have the option to send out a Request for Proposals for power supply. If
there is a cheaper source of power out there than what we are guaranteed
from East Kentucky, then we would be interested in investigating that."
Anderson stated that should the Electric Plant Board not receive power
from South Kentucky RECC or TVA, it will be in the market to purchase
electricity elsewhere. He says that will not be an easy task.
"If the people of Monticello decide not to sell to us, which we feel
would not be a good decision, you can about be guaranteed that rates will
increase, and probably significantly, because the old TVA contract is gone.
The only way Monticello Electric Plant Board customers can return to TVA is
by agreeing to a very healthy penalty over a four-year period, which would
have to be absorbed by the rate payers," said Anderson.
Anderson said that TVA has stated the penalty would be at least 1-cent
per kwh, or about a 14 percent increase. The Electric Plant Board could
send out another request for proposals, but the last one netted only three
"If the Electric Plant Board goes through this process again, we don't
see there will be any better results," stated Anderson. "This truly is a
choice that will be decided by the citizens of Monticello. We just want each
one to make sure they understand all the facts before that decision is
finalized. They will all have to live with that final decision for years to
Anderson stated that he thinks if all the Electric Plant Board customers
can review this information and look at the long-term picture, he feels they
will agree this is the best deal for everyone involved.
"We can guarantee without a question that service will be equal to and
very possibly even better from the size and standpoint of what's available;
reliability can definitely be better, especially during emergency
situations; rights-of-way will be kept as good as it is now or better; all
MEPB employees will be given an opportunity for employment and will receive
more chances to advance; and by SKRECC serving both Monticello and Wayne
County, there could be even better participation in that community; from an
operational standpoint of getting service and the cost to be served; there
are advantages to SKRECC; all MEPB customers will receive a free $25
membership to SKRECC, paid for by the city of Monticello; many MEPB
customers will be receiving a refund on their deposits due to differences in
the MEPB and SKRECC policies; and as far as financial aid to the low income,
we heavily support the Hope Center, and have the availability of Lake
Cumberland Community Services and LIHEAP."
Anderson adds that South Kentucky RECC's program, the People Fund, is
also available to help organizations in the community. The People Fund was
started in 2004 to financially help meet community needs not met by other
agencies or resources. To date, approximately 3,000 members are
participating in The People Fund, which allows South Kentucky RECC members
to "round up" their electric bills to the nearest dollar, with an average of
50 cents per participating member being contributed each month to the
This money is then available in the form of grants to programs in the
Monticello-Wayne County community, and has been awarded to such
organizations as the local Family Resource Centers in the schools, the
Extension Office and the Hope Center.
Monticello voters will make an important decision when they go to the