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PR-08-86 -- PSC Grants Rate Increase To Kansas City Power & Light
Contact: Kevin Kelly (573) 751-9300
FOR IMMEDIATE RELEASE -- DECEMBER 7, 2007
JEFFERSON CITY—The Missouri Public Service Commission has approved a rate increase for Kansas City Power & Light Company (KCPL), the second rate increase associated with an experimental regulatory plan for the western Missouri electric company. The Commission’s vote was 3 to 1.
The Commission’s order grants a rate increase of approximately $35.3 million. When KCPL filed its rate request on February 1, 2007, KCPL sought to increase annual electric operating revenues by approximately $45 million. Under the decision, residential customers would see electric rates increase by approximately 8.4%. The new rates are scheduled to take effect on January 1, 2008.
In 2005, the Public Service Commission approved an agreement among parties which established the experimental regulatory plan. That plan details the supply, delivery and pricing of electric service to be provided by KCPL into the future.
The experimental regulatory plan includes environmental upgrades to a number of KCPL’s existing power plants, wind generation, construction of a new coal-fired power plant (Iatan 2), and various customer programs designed to conserve energy.
The Commission’s order in this rate case addresses costs associated with KCPL’s air quality improvement investments in the new Selective Catalytic Reduction (SCR) system at the company’s La Cygne 1 plant; investments in distribution and transmission facilities for improved reliability; and continued investments in customer affordability, energy efficiency and demand response programs.
The rate case decision also reflects an increase in operation and maintenance expenses as well as fuel costs since KCPL’s last rate case.
As part of its decision, the Commission authorized KCPL a return on equity of 10.75%. KCPL sought 11.25% in its rate request. “The Commission has an obligation under the law, as well as a matter of practical necessity, to allow KCPL an opportunity to earn a return that will allow it to compete in the capital market. No one, including ratepayers, benefits if KCPL is starved for capital, especially while KCPL is investing hundreds of millions of dollars in infrastructure to implement the Experimental Regulatory Plan,” said the commission.
KCPL serves approximately 271,000 electric customers in 13 western Missouri counties.
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