Will hold a work session to line up the financial numbers in question; date not set yet
Described as being “between a rock and a hard place,” the decision to raise rates a total of 21% over the course of two years drew impassioned comments both from citizens facing those increased electricity bills and the Henderson Municipal Power & Light general manager advocating for the financial health of his utility.
Ultimately, the Henderson City Commission decided to table the decision until a later date, and in the meantime, reconvene for a special called meeting to discuss HMP&L’s specific financial numbers that were often a point of disagreement and contention during Tuesday’s city commission meeting. A time and date was not offered at the meeting for the special called meeting.
At Tuesday’s public hearing portion of the meeting, numerous residents spoke about the great need in Henderson and people living on fixed incomes who won’t be able to afford any rate increase.
HMP&L’s proposed 21% increase over two years includes four steps along the way: On Jan. 1, 2027, a 6% increase; on June 1, 2027, an 8% increase; on Jan. 1, 2028, a 3% increase; and on June 1, 2028, a 3% increase. All told, by June 1, 2028, the total increase, which includes compounding interest, would come to 21.45%, HMP&L General Manager Brad Bickett told the Hendersonian.
Bickett said the increases were proposed to be spread out so customers can better handle them, and the two-year plan with four steps is the best manner to do it. The increases are proposed because some of the energy contracts that HMP&L is entering into in mid-2027 will cost the utility 15% more.
If the rates aren’t raised, it would cause HMP&L to lose revenue, draw down on its 180-day reserves and drive the utility’s debt higher in the future, Bickett said. That would cause an even higher rate increase in the future, he said. It could also cause the utility to be in default with some of the power contracts it has signed, he said.
The need to increase rates to keep the utility’s finances in line, however, conflicts with many Henderson residents’ own finances, some saying they can’t afford their electric bill to rise by any amount.
Resident Willie Ruby, of Seventh Street, was one of several who criticized the city leaders, saying poor people can’t afford it.
“I don’t think it’s right,” she said, adding city leaders don’t ask constituents what they want but instead “just do what you want to do.”
Taylor Heady, a Villa Drive resident who does a lot of volunteer work and advocacy for the local homeless population, asked that city commissioners be mindful of those residents who are struggling financially, including senior citizens on a fixed income.
“Please take those people into consideration when you guys are looking into rate changes,” Heady said.
Similarly, Kendall Dean, the executive director of the Father Bradley Shelter for Women and Children, told the commission that her organization is “experiencing some of the highest demands for service in our history.” She said she knows that HMP&L has costs to pay, but also asked that it be aware of the “unintended consequences” of rate increases for those people struggling to stretch paychecks and remain in their homes.
Just as impassioned was Bickett, who at one point said it was Mayor Brad Staton who had in March consulted with him and HMP&L’s chief financial officer. Bickett said Staton asked him to come back after the election with the four-step plan to increase rates. Bickett said Wednesday morning that the increases could have been spread out even more than four steps, perhaps starting a first payment in the spring. “We could have,” Bickett said Wednesday morning.
Staton acknowledged both the meeting and his request to hold off on presenting this till after the November election. The mayor said that “sometimes” people value their ability to get elected over doing what’s right for citizens and he wanted to be able to have an objective discussion about the right path to go.
“I just wanted the discussion to be had in an objective manner,” Staton said.
At Tuesday’s meeting, Bickett told the mayor, “You asked us to do this.” This was at a point when the commission was contemplating tabling the issue for a later meeting. “Don’t put HMP&L’s financial stability at risk,” Bickett said.
Later, Bickett—with greater urgency—told commissioners, “I’m telling you, don’t put this off. I’m asking you, pleading with you, don’t put this off.”
Bickett’s intensity was fueled in a similar vein to what fueled residents’ passion—inflation. A slide Bickett presented listed costs the utility incurs regularly with items increasing by 446%, 236%, 211%, and others showing a doubling of price. Another slide held a list of major capital projects planned, including upgrades and replacements, that combined will total more than $20 million with the top dollar project being a new substation near Wathen Lane to serve the north end of town.
But the prime piece presented for the proposed rate hikes was the 15% increase in power costs associated with the contracts HMP&L has signed with providers as part of the Midcontinent Independent System Operator, or MISO, which is the transmission organization—of which HMP&L is a member—that coordinates the grid operations and operates the electricity market.
The City of Henderson Utility Commission, which is the board that oversees HMP&L, approved the four-step rate increase plan at its Oct. 26 meeting.
Throughout the night, Commissioner Robert Pruitt objected to the rate increase proposal. He said that cost of living increases on people’s salaries are 2-3%, which comes nowhere near a 20% increase at the end of two years.
He also said that the city has a compassionate government and a rate increase approval would be out of character.
“What kind of a city are we?” he said.
Another disagreement during the meeting involved the amount of the electricity costs of a typical resident. Bickett said the average electricity usage of a Henderson household is about 1,000 kWh per month, which puts the electricity portion of a utility bill at about $106.84.
In two years with the 21% increases in place, a resident that uses 1,000 kWh would be paying $132.48 on the electricity portion of the utility bill, Bickett said, who noted that the electricity portion of the bill in two years will still be lower than other utilities’ current electricity rates. Kenergy’s current rate for a 1,000 kWh per month user is $177.73 while across the river, Centerpoint’s is $224.95, Bickett offered.
Pruitt said there’s very few people who pay only $100-plus on their bill and said most pay $500 to $700. But Bickett pointed out that that number is the total of the utility bills, which include charges for gas and water usage as well as other built-in fees.
Residents at the meeting also asked that HMP&L look into other aspects of its operations, such as finding cost-cutting measures and finding a way to be a self-reliant utility that produces its own energy instead of buying contracts from other companies.
Bickett said that is an aim of HMP&L and mentioned the Henderson County Solar project currently being constructed near Ky. 425. Bickett said that the delays in construction of the project are having some effect in the rate increases. The project will supply 20% of HMP&L’s energy over the course of a year once it is up and running. But because the project won’t be completed by next summer, the utility had to go find contracts for energy, Bickett said.
“This would have been naturally spread out more if we had solar in,” Bickett told the Hendersonian in a previous interview.
He also added that a battery energy storage unit that had been planned for a location next to the utility’s substation #7 on South Green Street, which was not granted a conditional permit by the city’s Board of Zoning Adjustments about two years ago, would have also allowed for rates to stay lower. Bickett said he hopes more residents will be open to battery storage, especially in light of fewer thermal runaway fire events at lithium ion facilities nationally recently as technology has improved. He also said that sodium ion facilities, which create no fires, are becoming more affordable.
After a first reading of the ordinance to impose the rate increase schedule at the end of the meeting, Staton asked commissioners where they were on the issue. Kelsey Hargis said she hates the position HMP&L and the community is in, but the inflation reflects current times and she’s “not ready to jeopardize our utility company or put them in a financial strain.”
Pruitt said that people on the East End and Sand Lane area and other areas “are struggling.”
“People can’t afford to live,” he said.
Commissioner Rodney Thomas said there must be an increase. But after hearing citizens discuss how the rate increases will affect them, he said, “I can’t swallow 20%.”
Knowing the commissioners’ opinions, Staton offered a couple options. The first was to vote down the ordinance’s first reading; the second was to table it to a future meeting and obtain more information in the interim. Commissioners briefly discussed setting a date for a special called meeting for next week, but didn’t immediately find a time that works for all. It will be announced later.
Commissioner Austin Vowels, in his remarks, said that hearing from residents’ complaints about the safety net options for those who have difficulty paying their utility bills is one side of the issue.
Residents during the meeting said it was difficult to receive help in certain situations. Those safety nets include a fund from HMP&L that is handled by Henderson Christian Community Outreach, a fund containing money the City of Henderson put into place to help residents with water bills about two years ago and other funds from various organizations in town. There’s also a new fund that the city has created called the Spirit of Henderson, which is handled in the bill-paying area of the Municipal Building.
The other side Vowels mentioned is that HMP&L is battling inflation and rising costs—and the utility is still obligated to fulfill its contracts. He said the situation has put us “between a rock and a hard place” and suggested improving the safety nets before any rate increases are approved.
