Economy & Finance

Big Rivers-HMP&L dispute heads to Court of Appeals

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Big Rivers Electric Corp. is appealing a recent ruling in its multi-million-dollar surplus electricity dispute with Henderson Municipal Power and Light to the Kentucky Court of Appeals.

The two power companies have been at odds since 2008 over which company has the right to use generation at the city of Henderson’s Station Two power plant near Sebree that HMP&L reserves on an annual basis but doesn’t always need.

Big Rivers contends their contract allows it to take the city’s unused generating capacity whenever it wants and pay HMP&L a set fee.

But HMP&L insists the contract permits it to offer the surplus power on the open market, and that Big Rivers’ only right is to be able buy the power at the same price that a third party has offered to pay.

In May 2012, a panel of three professional arbitrators ruled in favor of HMP&L.

Big Rivers appealed the arbitrators’ decision to circuit court. In early December, Henderson Circuit Judge Karen Wilson upheld the arbitration panel’s ruling.

Now, Big Rivers is taking that ruling to the Court of Appeals, the state’s second-highest court, to review the correctness of the circuit court’s decision.

“We continue to believe the arbitrators got this wrong,” Big Rivers President and CEO Mark Bailey said Thursday afternoon.

“We understand we have a very narrow basis for appeal,” he said, “but we believe (that the arbitration panel’s method for resolving the power dispute) cannot be done on a practical and day-to-day basis, and we have some concerns about the legality of it.”

Big Rivers is being indemnified — including having its legal expenses paid — by LG&E and KU Energy LLC, a former operator of Station Two.

“We work cooperatively them, and we both believe this is the best course,” Bailey said.

HMP&L General Manager Gary Quick couldn’t be reached for comment Thursday.

The defendants in the case are Henderson Utility Commission, which oversees HMP&L, and the city of Henderson.
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