A Franklin Circuit Court judge on Wednesday upheld the Kentucky Public Service Commission’s opinion that it has statutory jurisdiction over the longstanding dispute between Henderson Municipal Power & Light and Big Rivers Electric Corp.
And because the PSC has jurisdiction, the commission’s past order that HMP&L pay its share of the costs of decommissioning the Station Two power plant in Sebree stands, said the ruling signed by Franklin Circuit Court Judge Thomas Wingate.
The two energy providers shared the use of Station Two until its closure in 2019 under terms laid out in contracts signed in 1970, according to the court document.
“The (Kentucky Public Service) Commission issued an Order on August 2, 2021, finding that it has jurisdiction over the Station Two Contracts and that the Contracts require the City to pay its share of past due Station Two operating costs, as well as approximately 22% of decommissioning costs,” said the ruling. “The Commission found that Big Rivers is responsible for the remaining 78% of the decommissioning costs.”
According to a document Big Rivers sent to the Hendersonian on Thursday, HMP&L owes them more than $2.2 million. It says that Big Rivers has invoiced HMP&L for $2.6 million and received $363,000-plus.
Wingate’s ruling says that the PSC has jurisdiction because HMP&L and Big Rivers entered into contract in 1970 which was overseen by the PSC, and that the Henderson utility and the city of Henderson also agreed to later amendments to the contract, also overseen by the PSC. With that precedence, the division of the costs of the final years of operation and decommissioning of Station Two—which was used by HMP&L and Big Rivers for about 50 years—should also fall under the jurisdiction of the PSC, said Wingate’s order.
Two times, according to the statement of facts in Wingate’s ruling, HMP&L has argued that the Kentucky Public Service Commission does not have jurisdiction in the decommissioning of Station Two, an argument echoed by HMP&L General Manager Brad Bickett in a phone interview with the Hendersonian on Thursday.
Bickett said the commission has never been called on in matters of arbitration between the two entities throughout the years. He said only the original 1970 contract and amendments to that contract through the years were overseen by the PSC. Every other legal disagreement between them—including arbitration, mediation and other skirmishes—were taken to the court system, where this current decommissioning costs dispute should be settled, Bickett said.
“This should be in a court,” Bickett said.
The scope of the dispute extends to the last four years of Station Two’s operations, including the costs of running the station and percentage of revenues, Bickett said.
He added the gist of the ongoing quarrel is simple.
“We believe they owe us money,” Bickett said. “They believe we owe them money.”
Bickett said Big Rivers owes HMP&L about $7 million.
Meanwhile, the process of decommissioning Station Two has been ongoing, despite the legal quarrels. The old Reid Station and Station Two smokestacks were imploded in April 2023.
The Hendersonian contacted Jennifer Keach, a spokesperson for Big Rivers, who forwarded the financial information which was contained in a Statement of Position from Big Rivers. In it, the electric corporation listed five areas of the decommissioning: Ramp Down, Asbestos & Demolition, Landfill, Ash Pond & CCR, and Excess Henderson Energy. It listed the total amount due from HMP&L in each category and what has been paid.
Keach said she spoke to Big Rivers’ counsel and CEO but neither contacted the Hendersonian before press time. The Hendersonian also reached out to counsel representing HMP&L who also did not return the call before press time.
Bickett said he will not know if HMP&L will appeal the ruling until its board and attorneys can discuss it.
