Conway’s Utilities Rate Hike Scandal

Posted in: Jack Conway, Special Interests, Utilities

Serving as the chief advocate for the consumer in the Kentucky, Attorney General Jack Conway represents the consumer during negotiations for utility rate increases. But sources reveal that he financially benefits from utility rate increases through his investment in Kinder Morgan Energy.

According to financial disclosures, Jack Conway owns between $1 to $5 million in stock in Texas energy giant Kinder Morgan Energy. Records also show that Kinder Morgan Energy Partners own many petroleum and coal storage terminals in Kentucky (Source).

In 2010, the Kentucky Public Services Commission (PSC) approved a $6 million utility rate increase from Atmos Energy, a Texas based natural gas utility company. Attorney General Jack Conway personally approved the $6 million rate increase while serving in his official capacity as the Commonwealth’s Attorney General.

Atmos Energy serves 180,000 customers in 38 Western Kentucky counties. According to the Federal Election Commission Jack Conway received over $10,000 in campaign contributions for his U.S. Senate campaign from Atmos Energy executives, PACs and Atmos’ lobbying firm, Capital Link Consultants. The campaign contributions alone raises serious questions about the appearance of impropriety. But the fact that Atmos Energy and Kindred Morgan Energy financially benefit from one another would suggest that Conway is guilty of a conflict of interest.

Records show that Kindred Morgan Energy own a large section of pipeline in Colorado called the Colorado Lateral which serves the natural gas transportation needs of Atmos Energy (source). By Jack Conway owning large sums of stock in Kinder Morgan Energy, approximately 90% of his current stock portfolio, it would appear he is guilty of conflict of interest seeing that he financially benefits from Atmos Energy. The same utility company he approved for a $6 million utility rate increase in Kentucky.

In 2009 Kinder Morgan Energy Partners paid a $25 million fine to settle a dispute that they sold 259,000 tons of coal belonging to the Tennessee Valley Authority from its shipping terminals in Kentucky. So they are big movers of coal in Kentucky. So much so it seems obvious that Conway would benefit financially when the wholesale price of coal or gas rises.

Kinder Morgan Energy owns the Natural Gas Pipeline of America (NGPL). A stretch of pipeline that runs from Southern Texas to the Great Lakes and back again. The natural gas that is purchased by consumers in Kentucky would travel through the NGPL through Missouri and into Kentucky via one of a half dozen pipelines employed by Atmos Energy (SOURCE). Kindred Morgan Energy executives also provided over $18,000 in campaign contributions for Conway’s U.S. Senate campaign.

Attorney General Jack Conway’s stock in Kinder Morgan Energy most certainly creates a conflict of interest. Conway is tasked to serve the consumer during utility rate increase discussions with the KPSC, but he is most certainly financially benefiting from the rate increases. Conway must immediately disclose any profits earned from his Kinder Morgan Energy stock for public inspection.

UPDATE: WHAS11 Reports: Atmos Energy, the natural gas company with ties to political contributions to Jack Conway’s Senate campaign, was awarded another 3% rate increase on May 28th by the Kentucky Public Service Commission.

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