KFTC members push forward with EKPC campaign, call-on the US Inspector General of the USDA

KFTC members have joined other rural electric co-op customers across the state in signing a letter to the Inspector General of the USDA questioning approval of risky financing for the proposed Smith power plant in Clark County.

The letter was submitted today, and KFTC members Steve Wilkins and Barb Bailey spoke to the media on a telephone conference this morning.

The Rural Utility Service, an arm of the USDA, normally provides loans to electric co-ops, but in 2008 the RUS put a moratorium on loans for financially risky coal and nuclear plants. To go ahead with the Smith plant construction, East Kentucky Power Cooperative needed approval from the RUS to seek $921 million from Wall Street banks.

Not only did RUS grant this permission but it also said EKPC could pay back its private loans before paying the billions it already owes the federal government. That means if EKPC defaults on its loans or goes belly-up, ratepayers will foot the bill.

From the letter:

The decision to proceed with financing and building this unnecessary coal plant will force EKPC to seek approval for electric rate increases at a time when many Kentucky families and businesses are already struggling to pay utility bills. This could eventually lead EKPC, which is already financially unstable, to default on its debt obligations. By subordinating its existing mortgage to other financial interests, RUS is placing in jeopardy the billions of taxpayer dollars it has loaned or provided loan guarantees to EKPC, and effectively guaranteeing that our electric rates will substantially increase.

On the press call today, KFTC member Barb Bailey questioned why EKPC needs a new coal-burning plant, when it hasn’t shown a real need and when renewable energy sources are less risky, cheaper and readily available.

"The fact that EKPC doesn’t even really need this plant, and their finances are so shaky – those should have been a deal-breaker for the RUS,â€ Bailey said. "EKPC could meet their energy needs at a lower cost with energy saving programs and renewable energy.â€

To learn more about the entire EKPC campaign, click here.