Missouri Public Service Commission

JEFFERSON CITY---The Missouri Public Service Commission has approved an agreement which addresses Vicinity Energy Kansas City, Inc.’s (Vicinity) request to revise its Production Adjustment Cost Clause (PACC) rates for steam service as well as issues arising from the natural gas price spikes that occurred in February 2021.

In a filing with the Commission on February 1, 2021, Vicinity sought to reduce customer rates for changes in PACC production costs experienced between January and December 2020. According to Vicinity, the main reason for the reduction in costs in 2020 involved the cost of natural gas in 2020 versus the cost of natural gas in the base PACC cost.

Under an agreement filed with the Commission on March 12, 2021, Vicinity and the Public Service Commission Staff indicated that implementing a reduction now will result in even larger increases in the next PACC filing due to natural gas price spikes that occurred in mid-February 2021. Natural gas costs are the largest component in the calculation of Vicinity’s PACC.

“The provisions of this Agreement are designed to both eliminate the up and down swings, and to mitigate the impact of the February gas price spikes on customers’ bills,” said the agreement. Under the agreement, the current PACC factor will be $0.00 effective April 1, 2021.

Under the agreement, the amounts that would have been refunded to customers will be captured as a regulatory liability and used to directly offset a portion of the PACC increase driven by the mid-February natural gas price spikes. Vicinity’s tariffs allow Vicinity to make a PACC filing with the Commission in August.

“The Commission finds that the Stipulation provides a reasonable way both to accommodate and meet the requirements of the PACC tariff and to mitigate the effect of the weather event on rates,” said the Commission.

Vicinity provides steam service to approximately 50 customers in Jackson County.

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Case No. HT-2021-0245