Henderson households could see their electric bills climb in steps starting in January 2027, with Henderson Municipal Power & Light officials proposing four separate rate increases that would add up to about 21% by June 2028. The utility says the hikes are needed to cover higher purchased-power costs along with rising operating, maintenance and capital expenses.
According to 14 News, the proposed increases would hit customer classifications in four successive steps: about 6%, 8%, 3% and 3%. Brad Bickett, general manager for Henderson Municipal Power & Light, said electricity demand is rising while market generation costs have become more expensive, a combination driving the need for new rates. HMP&L's current plan was described as covering costs only until 2029, meaning the utility says it needs the additional revenue to stay ahead of its obligations.
Why HMP&L Says Buying Power Beats Building It
HMP&L relies almost entirely on contracts with outside power providers rather than generating its own electricity, a structure the station's report also notes. The utility explored producing electricity locally but found it could not be done more cheaply than purchasing power under its existing contracts. Bickett said the power contracts remain less costly than other options HMP&L evaluated, according to the same report.
That reliance on the wholesale market has a history. After completing its first integrated resource plan in 2018, the utility joined the Midcontinent Independent System Operator and began buying power on the wholesale market, as detailed by the American Public Power Association. HMP&L closed its second coal plant in 2019, deepening its dependence on outside suppliers. The utility serves about 12,000 customers, per the same organization.
A New Long-Term Supply Deal Takes Shape
Part of HMP&L's strategy for locking in power heading into the new rate period involves a fresh agreement with a regional supplier. The Kentucky Municipal Power Agency signed a 10-year deal to provide 32 megawatts of capacity and associated energy to Henderson Municipal Power & Light beginning in 2027, according to The Hendersonian.
The utility has weighed building its own generation before. In 2022, HMP&L was considering a natural-gas peaking plant to help meet high-demand periods and reduce exposure to volatile market prices, The Gleaner reported at the time. Bickett estimated that proposed plant would cost around $58 million and provide 30 to 40 megawatts of capacity, and he pointed to regional power-market prices that peaked at $881 per megawatt-hour on June 15 of that year, compared with an average cost of $40 to $50 per megawatt-hour, as evidence of how exposed the utility can be to market swings.
HMP&L later tested the market again. A 2023 request for proposals found that solar paired with battery storage penciled out about 15% less expensive than a natural-gas reciprocating-engine plant on an all-in basis, per the American Public Power Association. The utility ultimately awarded a bid for a 50-megawatt solar project, a step in its broader shift away from coal-fired generation.
What Comes Next for Customers
The Henderson City Commission will hold a public hearing on the proposed rate increases, giving residents a chance to learn about the plan and share feedback before commissioners consider any action. The evidence reviewed does not specify a hearing date. State law governing municipally owned electric utilities, outlined by the Kentucky General Assembly, requires rates and service standards to be the same for customers inside and outside a utility’s corporate limits.
For customers worried about affording higher bills, assistance programs are available for those facing financial challenges. HMP&L has partnered with Audubon Area Community Services on a weatherization program aimed at helping low-income customers reduce their energy usage, an effort that could soften the impact of the proposed increases for households that qualify.
