Eastern Kentucky native son and author Jesse Stuart once wrote, “If these United States can be called a body then Kentucky can be called its heart.” My experience shows me that he was referring to the grit, determination and pride of the people of Eastern Kentucky.
As Kentucky Power’s new president and COO, I am proud to join you and our employees in Eastern Kentucky. We are your neighbors and friends, and we share that same grit, determination and pride in our company. It’s what makes us dedicated to work hard for you in providing, safe and reliable power.
That pride is also why I believe Eastern Kentucky is primed for economic growth. Kentucky Power is committed to leading this charge forward with economic development. In 2017, we have been a key player in many major economic development announcements. These include Braidy Industries announcing its plans to build a $1.3 billion aluminum rolling mill and hire 550 full-time employees and 1,000 construction workers, Wright Concrete & Construction’s expansion plans in Greenup County that will employ 130 full-time workers, and Martin County’s first aerospace industry, Thoroughbred Aviation, locating a helicopter and fixed wing maintenance repair facility at the Big Sandy Regional Airport.
These projects are just a sampling of our commitment to attract industry and good paying jobs to the region, from Greenup County to Letcher County and all counties in between. Since 2012, Kentucky Power has invested $2.5 million in economic development in Eastern Kentucky and continues to do so through our grant programs.
More recently, we were among a contingent traveling with Gov. Matt Bevin to sell our region to aerospace manufacturers at the Paris Air Show. This event is the center of the aerospace business world where manufacturing deals are made with aviation and aerospace industrial leaders from around the globe. The Kentucky group conducted 23 recruitment meetings over four days, including 14 with CEOs of major aerospace and defense companies, such as Boeing, Airbus and Lockheed Martin. I am confident this work will lead to development in Eastern Kentucky.
Economic development is at the core of our vision at Kentucky Power for a strong Eastern Kentucky. Kentucky Power is using its national and international affiliations to spread the message that our region is a major player for manufacturing. I believe this aggressive, innovative approach to economic development and diversifying our industry is the avenue to successfully revitalize Eastern Kentucky. Kentucky Power will continue to lead the charge with our partners to attract investment and create jobs.
There is no doubt economic change is coming, but that change does not happen overnight. Until then, Kentucky Power is faced with the reality of escalating expenses and a decline in the customer base to pay those expenses. We are doing our part to cut back and reduce costs internally. We even just completed a refinance of a portion of our long-term debt that significantly cut our interest rate that will save nearly $8.1 million a year.
Unfortunately, our cost-saving measures are not enough to counteract the loss of customers and increase in expenses needed to run a public utility. That is why we filed a regulatory review with the Kentucky Public Service Commission seeking to address our operational deficiencies through a base rate filing.
The Commission is tasked with ensuring the implementation of the regulatory compact. That compact calls on the Commission to ensure that utilities are providing safe and reliable service to customers in their territory in exchange for reasonable rates that allow a utility the opportunity to earn a fair return on its investment and to allow it to continue to invest in infrastructure. It is a thorough and transparent public process. Kentucky Power’s financials are an open book before the Commission as part of our filing. I am confident this regulatory review will support the reasonableness of the rates and show the hard work we are already doing at Kentucky Power to effectively and efficiently manage our business.
We do not make these difficult rate decisions lightly but with caution and a mindful review of all options so that we can continue to serve residents and businesses throughout the region. The loss of customers is the single largest driver of this straight forward case. Kentucky Power is interested in a long-term solution that strengthens our region and provides success for everyone. That is why we are focused on long-term diversification of our economy through economic development efforts in every area. It is also why we are focused on being the corporate partner to lead the way in establishing Eastern Kentucky as a major aerospace manufacturing hub that benefits us all.