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PR-09-21 -- Public Service Commission Reduces Empire District's Request for Increase; New Rate Will Help Finance Services, Reliability and Low-Income Programs
Contact: Gregg Ochoa (573) 522-2760
FOR IMMEDIATE RELEASE -- JULY 31, 2008
JEFFERSON CITY -- The Missouri Public Service Commission on Wednesday approved a $22 million rate increase request by Empire District Electric Company to enable the company to offset increased fuel and purchased-power costs, upgrade two generation plants, fund environmental protections and continue programs to help low-income customers. The company had originally sought a $34.7 million increase.
The new rates, scheduled to go into effect on August 9, are estimated to increase the electric bill of average residential consumers by about $6.13 per month. The new rates will generate an estimated 6.7 percent increase in the company's electric revenues.
The order was approved by the commission in a 3-2 vote.
The new rates include $8.5 million to comply with new PSC infrastructure inspections and tree-trimming rules enacted to improve reliability and reduce outages caused by severe weather.
The new rate structure includes a fuel adjustment clause to help address volatility in costs for fuels, such as natural gas, the company uses to generate electricity. The fuel adjustment clause is intended to reduce rate shock to consumers and to help the company sustain operations when fuel prices fluctuate widely. As a conservation incentive, only 95 percent of fuel price increases could be passed on to consumers and fuel adjustment charges would appear as a separate line item on each customer's bill.
Under the commission's order, Empire's Low Income Program -- an experimental rate discount program for low-income customers -- will remain in effect.
Empire filed its request on Oct. 1, 2007, seeking an increase of $34.7 million under a return-on-equity (ROE) of 11.6 percent. In the order approved Wednesday, the commission authorized a $22 million increase with a return-on-equity of 10.8 percent.
The 10.8 percent ROE was consistent with testimony of PSC staff in the case.
In filing the case, the company indicated the increases were necessary to address increased fuel and purchased power costs, to make capital additions to its system, including the Riverton 12 generating plant and pollution control facilities at the Asbury Power Station, to offset costs related to ice-storm damage and to continue Empire's experimental regulatory plan that includes participation in the construction and ownership of the Iatan II Power Plant.
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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