Covington files lawsuit against Duke Energy over franchise agreement dispute

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Ken Smith City Manager | City of Covington

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After years of unsuccessful negotiations, the City of Covington has initiated legal proceedings against Duke Energy. The city seeks to resolve a dispute over Duke's claim to an exclusive and perpetual right to provide electric service in Covington without a franchise agreement.

City officials assure that this legal battle will not impact customer rates or service availability. However, they argue that a favorable ruling would compel Duke to be more responsive to local needs.

Mayor Joe Meyer stated, "This is a classic case of a big institution thinking it can do whatever it wants and that it can ignore established, reasonable, local ordinances." He emphasized the city's efforts to gain cooperation from Duke, which he claims has been unresponsive.

The legal action was filed in Franklin Circuit Court and with the state Public Service Commission (PSC), following authorization by the Covington Board of Commissioners on October 22. The issue at hand concerns only electric service.

City Solicitor Frank Schultz explained that Duke believes it operates under an inherited perpetual franchise from the Covington Electric Light Company. However, the city argues that a 1904 U.S. Supreme Court decision extinguished this alleged right.

Covington is asking for a court ruling against Duke's perpetual franchise claim and for the PSC to mandate compliance with the city's bidding process for electric service rights.

Meyer highlighted several negative impacts of Duke's current stance on residents and businesses. These include slow responses to requests for moving or insulating wires during renovations and lack of communication about other companies using utility poles.

Schultz added, "Franchise agreements at their core are about establishing a fair, equal, and level playing field." He criticized Duke's perceived disregard for local concerns due to its belief in an exclusive operating right.

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