Negotiations With Viacom

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“Viacom demanded a rate increase that’s 40 times the rate of inflation”

Frankfort Plant Board Cable-Telecom is in negotiations with Viacom, owner of MTV Networks, to continue offering Viacom’s channels, but believes the current proposal from Viacom would have costly repercussions for the local company’s customers.

While FPB is restricted from talking about specific rates, Viacom demanded a rate increase that’s 40 times the rate of inflation*. Imagine pulling up to the gas pump and finding that gas has gone from $3.50 a gallon to $6.00 – overnight. That’s the scale of some of these large increases.  In addition, Viacom may demand we drop their networks if we don’t agree to their proposal.

FPB is a municipal utility in Frankfort, offering cable programming, phone and broadband services throughout Frankfort & Franklin County while employing more than 200 people.

Cable Superintendent John Higginbotham said “ we have created a new web site, TVOnMySide.com to educate our customers on rising programming costs.  Across the country, networks are substantially increasing their fees to cable companies, which affect customers directly”

“Viacom owns popular networks such as MTV, Nickelodeon and Comedy Central.  But in order to offer these, the cable networks require us to carry networks that are not as well-known, networks such as  MTV2, MTV Hits and VH1 Classic.  And network fees account for the bulk of monthly cable bills.” explained Higginbotham.

Today's entertainment marketplace is changing rapidly, and there has been considerable consolidation among major media companies.  These mergers allow large programming companies significant leverage over independent cable companies such as FPB.

 Higginbotham added “Our goal is to protect our customers from significant programming fee increases.   We pay programmers such as Viacom a fee per channel per month per customer for their programming.  When these contracts conclude, we negotiate new agreements and that concludes that business deal.  But when a multibillion dollar company such as Viacom demands an unprecedented increase in its monthly fees, we believe it’s our responsibility to take a stand” Higginbotham concluded “These large increases impact all of us throughout Frankfort and we want to make sure our customers know we are working on their behalf.”

FPB  urges  customers to get the facts and stay  informed by visiting TVOnMySide.com.

* Source: 12-month period from January 2013 to January 2014, Bureau of Labor Statistics, released February 20, 2014.

Job Opening

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FPB  is no longer accepting paper applications.

 All applicants must apply online at from our employment page here or at the Office of Employment and Training.  The Office of Employment and Training has a resource center with computers for applicants that do not have access to a computer.

FPB also has a job opening for Meter Reader where the successful candidate will be responsible for reading electric and water meters, including connecting and disconnecting meters. 

Find out more here.

Debra Miles

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debra_miles-fpb.jpg

FPB lost a family member this week with the passing of Debra Miles.

Funeral services for Debra will be held Saturday, March 8 at the First Baptist Church, 100 Clinton Street, in Frankfort. Visitation will be from 11:00 a.m. to 12:45 p.m. and with the funeral service will beginning at 1:00 p.m.

Debra was a valued employee of the Frankfort Plant Board for nearly 30 years. FPB is saddened by her passing and wishes to extend our heartfelt condolences to Debra’s family and many friends.

She will be truly missed and will be forever a member of the FPB family.

Condolences, cards and flowers for the family may be delivered to the church or electronically sent to the church at fbcfrankfort1833@yahoo.com.

Computer/Phone Scam

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FPB recently received some information about a possible computer/phone scam. A few FPB customers have received phone calls from someone posing as a Frankfort Plant Board Computer Technician.  This person told customers that they were having a problem with their PC and then the caller attempted to get information from the customer.

If you receive a similar call, ask for the caller’s name and FPB ID number. If you are suspicious, please call FPB at 352-4372 and talk to a FPB Customer Service Representative.

Viacom and MTV Networks

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“Although we are working to negotiate a fair price for these networks, Viacom has the right to require us to remove them from your lineup on 4/1/14 until a new agreement is secured.”

As your hometown Cable TV provider, Frankfort Plant Board (FPB) is a part of your community and strives to provide customers local service at the best value possible.

We are currently in talks with Viacom, the owner of cable networks such as Nickelodeon, MTV, Comedy Central, VH1, TV Land, BET and many others. Viacom is seeking a large increase in the fees they charge for these networks and we are working to substantially reduce that increase. Significant network fee increases directly impact your bill and rest assured – we’re on your side to keep these fees low.

Although we are working to negotiate a fair price for these networks, Viacom has the right to require us to remove them from your lineup on 4/1/14 until a new agreement is secured.  We will offer to continue payment and carriage of these networks past March 31 until we reach a new agreement, but Viacom may refuse that offer.

As your local municipal utility, we sincerely appreciate your loyalty as we strive to deliver the best value for you.

 

Why would Viacom ask for such a large increase?

We negotiate agreements to carry networks in exchange for a monthly fee per customer. We are on your side and try to strike the best deal so it has less impact on your monthly bill. Viacom feels their networks have been underpriced and are seeking much higher rates each month, despite the fact that their most popular networks saw ratings declines through much of 2013. We are currently working with Viacom and are optimistic about reaching an agreement.

Why don’t you pay Viacom whatever they want so I don’t lose their networks?

We are committed to keeping the Viacom networks on your line-up and are actively working toward an agreement that does not burden our customers with excessive price increases. With the hundreds of channels we offer our customers, imagine the impact to your monthly bill if we just agreed to pay networks whatever they asked.

Which networks could be affected?

FPB carries the following Viacom networks on Classic Cable: Comedy Central (Channel 55 SD/555 HD), Spike (56/556), TV Land (63), Nickelodeon (69/569), CMT (89/589), BET (90/590), MTV (91/591), VH1 (92/592).  On Preferred Cable: Nick Jr. (131), Teennick (132), Nicktoons (134), Centric (170), MTV2 (171), MTV Hits (172), VH1Classic (173), VH1 Soul (174), CMT Pure Country (175).  On HD Plus: Palladia (774).

Where can I learn more about the status of these negotiations?

Visit www.tvonmyside.com

If we lose these networks, will I get a refund on my bill?

FPB is hopeful a deal will be worked out and the networks will remain part of our lineup, but if Viacom is unwilling to agree to reasonable rates, FPB will look at all of our options. Those options will include the possibility of adding other, comparable networks and/or reimbursement to customers. While no plans or details have been finalized, FPB will look at every option to ensure customer satisfaction.

FPB Electric Usage Information

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This has been an incredibly cold winter. This past January was one of the coldest on record. Customers may be seeing an increase in their electric bills for this harsh month.

Electric bills are based on usage. The more energy a customer uses, the higher their bill. Customers can get a good snap shot of how the weather has impacted usage this winter by looking at their current electric bills and the amount of kWh they have used. Customers can compare that usage in kWh to their previous bills kWh at other months of the year.  

click to enlarge

FPB, and our provider Kentucky Utilities (KU), experienced some of the largest winter load peaks ever this winter. In fact, FPB’s January bill from KU for the month’s energy usage was $4.7 million. That is the largest bill ever received from KU by FPB.

When comparing the dollar amount on current customer bills to last winters, keep in mind FPB had our annual rate increase back on July 1 (residential 6.4%), so there has been a rate increase since last winter. Taking that into account, on December 30th the Kentucky Department of Energy released information that FPB customers have the lowest residential rates in the state and are lower than 99% of the nation*.

*Data from Kentucky Energy Database, EEC-DEDI, 2013-Tweet December 30, 2013 from @KYDEDI #Frankfort residential #electricity prices are the lowest in #Kentucky. 99% of American households pay more.

FPB has been fortunate that we have seen minimal impacts on our electric infrastructure, with very limited problems during the multiple ice storms our region experienced. That is due in part to constant maintenance of our infrastructure, vegetation management programs and preparedness for harsh conditions and its potential impact on our service.

Below is statistical data about FPB, our load demand and the weather of January 2014:

  • FPB has 17,300 Residential meters  and 4,151 Commercial/industrial/municipal/miscellaneous meters (notice these are meters and not numbers of people served)
  • The peak demand for January 2014 was 142.9MW. That peak was recorded on January 7th (High Temp: 14.2 Low Temp: -4.5**).
  • That is nearly a 17% increase over the peak Demand for December 2013 (121.0MW on 12/12/13; High Temp: 29.3 Low Temp: 10.2) and a 14% increase over the peak day in January of 2013 (124.6MW on 1/23/13; High Temp: 34.8 Low Temp: 9.9).
  • If you compare the January 7 peak to a more “mild” winter day, for instance December 9th of 2013 (High: 33.8 Low: 25.9), the system peak demand only reached 106.9MW. That’s about 33% less than the peak demand on the 7th of this year.
  • According to KYMESONET, the Commonwealth's official source for weather and climate data, January 2014 had an average temperature of 25.9 degrees. The average temperature for January of 2013 was 36.1.
  • The same KYMESONET data listed the average high for January 2014 at 37.1 and average low of 14.8 compared to 44.2 and 28 in January of 2013.
  • Extreme low temperatures in January 2014 far exceeded those of January 2013. KYMESONET reported the following low temperatures in January 2014:
  • Nine days with the high temperature under freezing. 26 days with the low under freezing. Seventeen days with a low temperature under 15 degrees and eight days with a low at zero (0) or lower.
  • A report from January 2013 shows only three days with a low under 15 degrees and no days reported at zero or colder.

**Temperature data from KY Mesonet, Franklin County.

One particular increase customers will likely see on their bill is in the fuel adjustment cost or power cost adjustment.

Understanding the Power Cost Adjustment (PCA)

What is the Power Cost Adjustment (PCA)?

It is an industry standard system, accepted by all regulatory bodies (Federal Energy Regulatory Commission [FERC] and The Public Service Commission [PSC]), to help recover the cost of fuel it takes to generate electricity.

  • The Power Cost Adjustment (PCA) that appears on your bill represents the cost of the fuel for the KU power plants that generate your electricity. For the most part, it is the cost of coal, but it also can include the cost of natural gas and/or purchased power. Purchased power and gas-fueled power both tend to be significantly more expensive than coal-fueled power.

All money collected for the PCA is passed on to our wholesale power supplier KU.

  • The PCA is a pass-through expense. The Plant Board collects the PCA from its customers and then passes all of that money on to its wholesale power supplier, Kentucky Utilities (KU). FPB does not keep any of the PCA that it collects. FPB is a not-for-profit utility.

The PCA is regulated and monitored by a government agency.

  • Federal government regulators (FERC) allow the PCA charged by KU and their oversight ensures that only proper expenses are included. Proper expenses include the cost of power plant fuel or purchased power.

Why does the PCA vary so much from one month to the next?

The cost of power plant fuel and purchased power can fluctuate significantly from one month to the next for several reasons:

  • The market cost of coal, natural gas and purchased power may rise or fall.
  • If KU has a coal-fired generating unit out of service for maintenance, then that power must be generated by an alternative source or purchased on the power market, both of which tend to be much more expensive.
  • Even if all coal-fired generating units are operational, KU occasionally must operate natural gas-fueled units or purchase power from the market because power usage is so high. This tends to occur on days when it is very hot or very cold because homes and businesses are using more electricity for cooling and heating.


Understanding Your FPB, PCA and Energy Usage Summary

FPB is a not-for-profit utility, when our costs go up for something significant and uncontrollable like energy costs, unfortunately, the additional costs must be reflected in our bills to customers.

Fuel costs are the largest expense for electric utilities, FPB included, and fuel prices can vary greatly due to extreme temperatures. It creates a simple issue of supply and demand.  Recognizing this, the PSC, FERC and all other regulatory agencies, have allowed PCA, also called fuel adjustment charges, since the oil embargo of the 1970s. Under utility rate regulation, fuel costs are passed along to electric customers at cost.

For information on PCA click here.

Tornado Drill

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“ This will be a test, not an actual emergency.”

On Tuesday, March 4th at 10:07 a.m., the National Weather Service will conduct a test of the Emergency Alert System.

A “Tornado Warning” message will be sent to all participating broadcast television stations and cable television systems. This will be a test, not an actual emergency. If threatening weather should exist anywhere in the state on March 4th, the drill will be rescheduled for March 5th or whenever conditions are deemed appropriate.

FPB Investigating Recent Internet Outages

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“The outages are still under investigation, but it appears that they are the result of a Denial-of-Service (DoS) attack.”

Frankfort Plant Board experienced two Internet outages this week on the 25th and 26th for approximately 1 hour each night. The interruptions occurred on:

Tuesday, February 25th 2014 – 9:40p to 10:45p
Wednesday, February 26 2014 – 8:10p to 9:00p

The outages are still under investigation, but it appears that they are the result of a Denial-of-Service (DoS) attack. DoS attacks are an attempt to make a machine or network resource unavailable to its intended users. DoS attacks are increasing in frequency and severity, impacting providers and hosts world-wide. For more information on DoS attacks, read here:http://en.wikipedia.org/wiki/Denial-of-service_attack

FPB is working with upstream providers in an attempt to lessen the effects of future attacks; however, these types of attacks can be difficult to stop and there may be further attacks.

We apologize for any inconvenience experienced by our customers and will provide more information when it becomes available.