Dear Valued Customers,
This has been a challenging year on many fronts for our nation, our state, our community and most importantly you, our citizens and business leaders. As many of you may have read or heard recently, it also has been a challenging year for our municipal utility.
A recent newspaper article shared some details about our discussions with Big Rivers Electric Corp. and a surprise proposal Big Rivers made to potentially purchase our city-owned utility. As leaders of your community owned power company, we felt it was important to tell our customers more about that proposal and why it ultimately failed.
At HMP&L our top priority is to serve as trusted stewards of one of Henderson’s most valuable assets, maintain rates that are the lowest in the region and benefit all businesses and customers we serve, and to manage the utility for the long-term good of the City of Henderson. We have worked hard to do that over the last 125 years.
In relation to Big Rivers’ proposal letter, we feel it is important for our customers to know a few important facts.
1. Big Rivers DID NOT make a formal offer to buy Henderson Municipal Power & Light and keep its headquarters in Henderson. Instead, they offered to begin negotiations. Our history with Big Rivers, especially recently, has highlighted how difficult it can be to negotiate fair and equitable agreements or reach agreement on formal mediation.
2. Our local leaders took the offer seriously and were hiring an internationally known firm to provide an independent value for the utility to see if the offer to negotiate from Big Rivers was fair or reasonable. Our City Commission and Utility Commission had several discussions and were still gathering information when Big Rivers made its surprise announcement on Thanksgiving Eve that its headquarters will move to Owensboro.
3. Henderson Municipal Power & Light is much more valuable to our City than the amount Big Rivers initially proposed to pay. Nevertheless, we didn’t want to tell them “no” without fully considering the proposal and determining if the City should enter an expensive and time consuming negotiation with Big Rivers.
4. We DO NOT believe Big Rivers intended to keep a substantial operation in Henderson if it purchased HMP&L. According to Owensboro officials, they had negotiated with Big Rivers for two to three years to move the headquarters. Owensboro also offered financial incentives to Big Rivers. That negotiation process started after Big Rivers offered to buy Owensboro’s municipal utility and was turned down. The proposal letter Big Rivers sent to Henderson speaks of keeping a headquarters in Henderson but makes no guarantee of keeping the headquarters at its current location or of retaining a specific number of jobs in our City for the future.
5. Finally, Big Rivers’ proposal is among several initiatives and discussions we have been involved in this year attempting to settle disputes. We willingly participated in negotiations with members of our business community, and have offered significant concessions attempting both to reasonably resolve the differences and to keep the headquarters of Big Rivers in the City of Henderson.
There remain many short- and long-term issues in dispute between Big Rivers and Henderson Municipal Power & Light. Most are financial issues, brought about by the closing of Henderson’s Station Two Page 2 of 2 power plant that had been operated by Big Rivers. Many of the issues have to do with demolition of the power plant, future environmental plans, and a payment of millions of dollars owed to HMP&L by Big Rivers under our contracts. We have filed suit against Big Rivers to force them to honor our past agreements, and that is another reason to be cautious in entering a new contract with them.
We remain committed to defending Henderson taxpayers and HMP&L customers from paying more than their fair share of the costs related to our former partnership with Big Rivers.
So, what happens next?
Big Rivers has been studying a move to Owensboro for a long time. At least two years ago, they began negotiations to move to Owensboro. Big Rivers will eventually move to Owensboro, and we will work very hard to fill the hole that the move leaves in our community. We deeply regret Big Rivers’ decision to leave Henderson. Some Big Rivers employees live here and have been active in community service. We hope they will stay and remain committed to making Henderson a great place to be.
Some important points about Henderson Municipal Power and Light to remember:
1. As a public utility, HMP&L will continue to serve its customers with the lowest possible rates and the best possible service. We have locked in low cost power for the next few years and are actively planning a power mix that is right for Henderson’s future. Our rates are 20% to 40% below our surrounding utilities, and these low rates are an annual savings of over $12 million to our customers.
2. Our reliability, while not perfect, is truly outstanding and reflects our peoples’ efforts, sometimes in the worst possible conditions.
3. We’ve replaced our old streetlights with a modern LED system. At the same time, we’ve begun to renovate some of the alley lighting systems in the City.
4. We’ve begun undergrounding some of our downtown system for higher reliability and a more attractive downtown.
5. We provide significant support to local organizations, including the Chamber of Commerce and Economic Development.
6. We have established a low-income relief fund that helps our struggling customers meet their utility bills.
7. Lastly, we are locally owned and controlled and will always work in the best long-term interests of our customers and the City of Henderson. That’s what we’ve done for over a hundred years, and that’s what we will continue to do.
The differences between HMP&L and Big Rivers will be resolved by the courts with independent and unbiased judges making those decisions. At some point the judgements will be made, the appeals exhausted, and through it all the lights will be burning bright for Henderson residents and businesses.
Steve Austin, Mayor
Lin Shannon, Utility Commission Chair
Mark Weaver, Utility Commission Vice Chair
Jennifer Howell, Utility Commission Secretary
David Curlin, Utility Commissioner
Russell Sights, Utility Commissioner
Chris Heimgartner, Utility General Manager
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