PR-09-195 -- Change In Fuel Adjustment Clause Approved For Empire District Electric Company

JEFFERSON CITY---To primarily reflect changes in fuel and purchased power costs, the Missouri Public Service Commission has approved a request filed by The Empire District Electric Company to adjust the fuel adjustment charge on the bills of its electric customers. The charge appears as a separate item on monthly electric bills.

According to Empire’s filing on April 1, 2009, the variable costs of fuel and purchased power had increased over base fuel costs set in a July 2008 rate case. Empire’s FAC request is designed to recover energy cost increases of approximately $1.9 million.

For a residential customer using approximately 1,000 kilowatt hours of electricity a month, electric bills will increase by about $0.87 a month. The FAC adjustment, which takes effect on June 1, 2009, is interim, subject to both true-up and prudence reviews.

Empire stated it sought the FAC adjustment to reflect higher coal and freight costs and the reduced availability of the Iatan 1 generating facility. Empire stated those increases were partially offset by lower gas generation costs, spot market purchases at lower costs, and higher than anticipated off-system sales margins.

In a rate case decision in July 2008, the Public Service Commission granted Empire’s request to implement a fuel adjustment clause in order to address fuel and purchased power cost volatility.

Base electric rates were established in that case reflecting a certain level of fuel and purchased power costs. The fuel adjustment clause will reflect increases or decreases in those costs above or below those set in base rates.

The Empire District Electric Company serves approximately 147,000 electric customers in the Missouri counties of Barry, Barton, Cedar, Christian, Dade, Dallas, Greene, Hickory, Jasper, Lawrence, McDonald, Newton, Polk, St. Clair, Stone and Taney.

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Case No. EO-2009-0349