Utilities vie to service Wal-Mart

CYNTHIANA, KENTUCKY - The world's largest retailer has spawned a legal battle in Cynthiana, as two utility companies are vying to convince state regulators they should be chosen to provide it with electricity.

An order by the Public Service Commission, deciding whether Kentucky Utilities or Blue Grass Energy will provide temporary electricity for the construction of the Wal-Mart Supercenter.

To be resolved later is the larger question of who will provide permanent service, which could be worth about a quarter of a million dollars annually.

It's a legal face-off that has both sides counting the feet from their power lines to the proposed site. One is even boasting that it once served a cheese factory on the land in the 1930s.

Both KU and Blue Grass Energy serve parts of Harrison County, and each company's territory includes part of the land on which the Wal- Mart Supercenter is to be built, according to filings.

The supercenter, being built on land adjacent to the current Cynthiana Wal-Mart, is set to open in March 2007, KU said in its filings. The old building is to be demolished and become a parking lot and gas station.

Among the factors the PSC may use in deciding which utility will service the retailer are the proximity and adequacy of distribution lines, as well as which utility was first to service the site.

Blue Grass Energy contends it has an overhead line, originally built in 1938, within 30 feet of the proposed store. The co- operative says it began servicing the land in 1945 when it provided electricity to a tenant house on the farm.

KU, which has serviced the current Wal-Mart since August 1984, has a line that will be about 60 feet from the planned facility, according to its filings.

KU disputes whether Blue Grass Energy has indeed provided service on the majority of the land to be occupied by Wal-Mart. KU boasts that its service "dates back to the early 1930s, when it began providing service to a cheese factory located on part of the original... property," according to filings.

KU's attorneys claim the company has also provided service to a barn on the property since 1946 and continues to service it today.

KU also argues that its cheaper rates would offer Wal-Mart significant savings.

According to KU's filings, Wal-Mart could pay between $231,000 and $242,000 annually for service. It contends Blue Grass Energy would charge between $324,000 and $367,000 for the same service.

Blue Grass Energy responded in filings that the PSC has deemed its rates reasonable.

The two utilities and their attorneys are in the midst of setting a date for a hearing later this year on determining who will be granted permanent service.

The PSC's order determining which company will provide electricity to the retailer's construction crews on a temporary basis could come soon, said Tony Warren, a spokesman for Blue Grass Energy.

A Wal-Mart spokesman said the company is not favoring one party over another but understands their interest.

"When you've got food like we do, those coolers and cases are running all day," said Jason Wetzel, Wal-Mart's public-affairs manager for the Kentucky market. "Those things stay on, as well as the air conditioning and heat, so you can appreciate why they probably are vying for our business."