OMU takes action to join other municipals to form supply power agency

May 22, 2015 – Owensboro Municipal Utilities has taken action to join with as many as ten other Kentucky municipal electric utilities to form a new power supply agency to provide wholesale electric supply and services to its members.  The new agency will be called the Kentucky Municipal Energy Agency (KyMEA).

The other municipal electric systems considering membership are:  Barbourville Utility Commission, Bardwell City Utilities, Benham Power Board, City of Berea Municipal Utilities, City Utilities Commission of Corbin, City of Falmouth, Frankfort Plant Board, City of Madisonville, City of Paris Combined Utilities, and Providence Utilities.  These ten municipal systems currently receive their power from Kentucky Utilities Company under agreements that will terminate in most cases on April 30, 2019.

By working together, all members of KyMEA will be able to achieve economies of scale for power supply that can’t be achieved individually, resulting in long-term rate stability at the lowest possible cost to all rate-payers served by the participating cities.

The group has been working together to develop and implement arrangements under which the joint agency would purchase surplus electric energy and capacity from OMU and would evaluate future opportunities as they arise.  OMU operates the Elmer Smith Station in Owensboro, Kentucky, which is one of the lowest-cost producers of electric energy in the state.  The Elmer Smith Station is a 400 MW coal-fired electric generating station that is fueled from locally-mined coal.  OMU has made substantial investments to ensure that the Elmer Smith Station complies with all applicable environmental requirements.

Terrance Naulty, General Manager and CEO of OMU, said, “This arrangement would benefit all members by providing them with low-cost, environmentally responsible wholesale electric supply and offers significant opportunities to achieve economies of scale and diversity for future power supply.  Long-term projected electric rates for each participating city, including Owensboro, will be considerably lower than would other-wise be necessary were it not for KyMEA”.

In the coming months, the joint agency and its members will finalize the specific agreements necessary to establish the power supply arrangements for the members and obtain third party services to support the agency’s functions.