Madisonville Seal 01 300MADISONVILLE, Ky. (8/20/19) — Madisonville plans to purchase six power substations from Kentucky Utilities at a price of nearly $1 million.

Madisonville City Council approved utilities superintendent Chris Melton’s request during a meeting held Monday to buy the substations for $900,000 as part of their effort in joining Kentucky Municipal Energy Agency in 2015.

“This has been envisioned from the start,” Melton said, “to standardize everything in the electric department.”

Melton said he took the retained energy action for a secure payback. The city will no longer be required to pay KU $144,000 per year in substation rental fees. Maintenance costs around $20,000 each year.

Former Mayor David Jackson gave notice to KU five years ago that the city would be terminating the all-requirements contract with them, and that change went into effect May 1.

The decision to join with other entities in creating the cooperative energy agency came after more than 10 years of continuous price hikes involving the current provider that increased the cost of energy for both home and business owners, city officials said in previous meetings.

“This transition to KYMEA represents a tremendous economic development opportunity,” Jackson said last year. “It will provide reduced electric costs to both residential consumers and businesses.”

With KYMEA, the city previously indicated it will stabilize rates for its customers and get the best deal on energy purchases as possible, without escalating prices and resulting in projected savings.

“This will allow Madisonville to stay competitive in the market and stability in rates will contribute not only to Madisonville’s ability to attract new businesses, but also to the growth of the businesses that we currently have,” Jackson stated.

Savings were projected to be a 14 percent reduction in electricity rates that could be frozen for 10 years.

Melton said Monday night that it would be about a year before the department could do a cost analysis to determine the savings from joining KYMEA.

The 10 municipal electric utilities entered into an interlocal cooperation agreement to create the joint public agency. KYMEA collaborates to serve electric power to its members consisting of hydroelectric, solar, fossil fuel and wind sources.

KYMEA members include electric utilities of Madisonville, Barbourville, Corbin, Falmouth, Paris, Bardwell, Providence, Berea and Frankfort Plant Board.

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