STATE OF MISSOURI
PUBLIC SERVICE
COMMISSION
At a session of
the Public Service Commission held at its office in Jefferson City on the 9th
day of January, 2013.
In the Matter of )
Kansas City Power & Light Company’s ) File No. ER-2012-0174
Request for Authority to Implement )
Tracking No. YE-2012-0404
a General Rate Increase for Electric Service )
and
In the Matter of )
KCP&L Greater Missouri Operations
Company’s ) File
No. ER-2012-0175
Request for Authority to Implement a ) Tracking No. YE-2012-0405
General Rate Increase for Electric Service )
REPORT AND ORDER
Issue Date: January 9, 2013 Effective
Date: January 9, 2013
The
Missouri Public Service Commission is rejecting the pending tariff sheets and
ordering Kansas City Power & Light Company (“KCPL”) and KCP&L Greater
Missouri Operations Company (“GMO”) (together, “Applicants”) to file new tariff
sheets in compliance with this order.
The
Commission is authorizing return on equity as follows:
|
Applicant
|
%
|
|
KCPL
|
9.70
|
|
GMO
|
9.70
|
The Commission estimates that Applicants are authorized to increase
the revenue they collect from Missouri customers by approximately the following
amounts.
|
Area
|
Amount
|
|
KCPL
|
|
All
|
$64 million
|
|
GMO
|
|
MPS area
|
$28 million
|
|
L&P area
|
$21 million
|
That estimate is based on the data contained in the updated reconciliations
filed by the Commission’s staff (“Staff”) on January 8, 2013.
This
report and order also addresses the settlement provisions incorporated into the
Commission’s orders. As to those matters as to which some parties agree and no
parties oppose, but that are outside the Commission’s subject matter jurisdiction
to order, this report and order constitutes a consent order.
The
Commission does not specifically discuss matters that are not dispositive. The
Commission makes each ruling on consideration of each party’s allegations and
arguments, and has considered the substantial and competent evidence on the whole
record. Where the evidence conflicts, the Commission must determine which is
most credible and may do so implicitly. The
Commission’s findings reflect its determinations of credibility and no law
requires the Commission to make any statement as to what portions of the record
the Commission accepted or rejected.
On
those grounds, the Commission independently makes its findings of fact, reports
its conclusions of law,
and orders relief as follows.
Table
of Contents
I. Jurisdiction. 4
II. Procedural
Background. 5
III. Settlements. 9
A. Standard for Service. 10
B. Standard for Rates. 11
C. Conclusion as to Matters
Settled. 12
IV. Matters not
Addressed in Settlements. 13
A.
KCPL and GMO.. 14
i. Policy Matters. 14
ii. Return on Equity. 15
ii. Capital Structure. 24
iii. Cost of Debt 26
iv. Transmission Tracker 28
v. Winter,
Space Heat, and All-Electric. 33
vi. PURPA. 41
B.
KCPL Only (ER-2012-0174): Additional Resource Planning. 49
C. GMO
Only (ER-2012-0175) 51
i. Crossroads. 52
ii. Off-System Sales Margins. 60
iii. Fuel Adjustment Clause. 60
V. Compliance
Tariffs. 65
Appendix A:
Appearances. 68
Appendix B:
Briefs and Statements after Evidentiary Hearing. 71
Appendix C: USoA
Accounts for Other Regulatory Assets and Liabilities. 73
Appendix D:
Additional FAC Reporting. 74
Appendix E:
Tariff Sheets Rejected. 76
I. Jurisdiction
The statutes give the Commission jurisdiction
to determine Applicants’ terms, and amounts charged, for electrical service.
Findings
of Fact
1.
Each applicant is a subsidiary of Great Plains
Energy, Incorporated (“GPE”). GPE is a publicly traded corporation. GPE wholly
owns both Applicants, neither of
which is a publicly traded
corporation. KCPL is a Missouri corporation. GMO is a Delaware
corporation authorized to do business in Missouri. GMO is staffed with KCPL and
GPE employees.
2.
Applicants sell electricity at wholesale and
retail. Applicant’s service territories are in the central and northern parts
of the western side of Missouri. GMO’s service territory consists of two
districts, one called MPS, and the other called L&P.
3.
Applicants’ customers consist of approximately the
following.
|
KCPL
|
Classification
|
GMO
|
|
451,000
|
Residential
|
274,000
|
|
58,000
|
Commercial
|
38,000
|
|
2,100
|
Industrial, municipal, and other electric utilities
|
500
|
|
511,000
|
Total
|
312,000
|
Applicants each have their own generating
capacity, but also buy power to serve their respective customers, GMO more than
KCPL.
Discussion,
Conclusions of Law, and Ruling
The Commission’s jurisdiction
generally includes every public utility corporation,
which includes electrical companies.
Electrical companies include the Applicants because Applicants provide
electrical service to Missouri customers.
Regulating the Applicants’ service and rates is specifically within the
Commission’s jurisdiction through the use of tariffs.
The filing of tariffs began this action. Therefore, the Commission concludes
that it has jurisdiction to rule on the tariffs and determine Applicants’ terms
of and charges for service.
II. Procedural Background
On February 27, 2012, KCPL and GMO
filed the pending tariffs seeking revenue increases approximately as follows:
|
Area
|
Amount
|
Percentage
|
Per Day for a Typical Residential Customer
|
|
KCPL
|
|
All
|
$105.7 million
|
15.10%
|
$0.48
|
|
GMO
|
|
MPS area
|
$58.3 million
|
10.90%
|
$0.27
|
|
L&P area
|
$25.2 million
|
14.60%
|
$0.36
|
|
GMO total
|
$83.5 million
|
11.76%
|
|
The
tariffs bear an effective date of March 28, 2012. By order dated February 28,
2012, the Commission suspended the tariff until January 26, 2013, the maximum
time allowed by statute.
The suspension of the tariffs
initiated a contested case.
In the same order, the Commission set a deadline for filing applications to
intervene. Movants for intervention cited varying interests in this action,
including status as a supplier, industrial customer, advocacy group, seller of
a competing commodity. The Commission granted applications to intervene as set
forth in Appendix A, paragraph iii. Some of the intervenors are unincorporated
associations of legal entities. On October 16, 2012, the Natural Resources
Defense Council withdrew.
Intervenor Missouri Electrical
Users Association-KC (“MEUA-KC”), an association of industrial customers, charges
that the Commission’s notice to the public was inadequate because it did not
specifically refer to one of the proposals raised by another intervenor. In the
order dated February 28, 2012, the Commission directed that notice of this
action be provided to the
county commission of each county within applicants’ service area,
and made notice available
to the
members of the General Assembly representing applicants’ service area, and to the
news media serving applicants’
service area.
Further, the Commission ordered individual notice of local public hearings in
this action to every customer of Applicants.
MEUA-KC cites no authority showing that the Commission’s notice was
insufficient.
By order dated April 19, 2012, the
Commission established the periods relevant to the tariffs:
a. Test year to determine how much the Applicants need
to provide safe and adequate service at just and reasonable rates: 12 months
ending September
31, 2011;
b. Update for known and
measurable changes to amounts drawn from the test year: through March 31, 2012; and
c. True-up
for other significant items relevant to rates: through August 31, 2012.
The Commission also consolidated File No. ER-2012-0174
with File No. EU-2012-0130,
in which KCPL sought an order authorizing deferred recording of certain amounts
(“accounting authority order”).
The Commission convened local
public hearings in Applicants’ service territories as follows.
|
September 6
|
Nevada
|
|
Sedalia
|
|
September 12
|
St. Joseph
|
|
Riverside
|
|
September 13
|
Kansas City
|
|
Lee’s Summit
|
Staff filed a list of issues on October 11, 2012, and the
parties filed position statements, the last on October 15, 2012.
On December 21, 2012, GMO filed an
application, with a request for expedited treatment, for a waiver or variance
from the Commission’s regulation on the costs of complying with renewable
energy standards.
GMO also filed the same document in File No. ER‑2013‑0341. In
the interest of administrative efficiency, and to avoid duplication of effort
and potential inconsistencies, the Commission has addressed the matter under
File No. ER‑2013-0341.
On December 24, 2012, Staff and
KCPL filed notice of a new issue:
which demand-side programs a customer may opt out of under the Missouri Energy Efficiency Investment Act (“MEEIA”).
Staff recommends that the Commission not address the new issue because it is
too late to develop evidence and arguments. Staff is correct and the Commission
will not address that matter in these actions.
On December 17, 2012, Midwest
Energy Consumers Group (“MECG”), an association of large-scale purchasers,
filed a motion to update its reply brief with additional authorities. Applicants
filed a response to that motion with additional authorities of their own on December
20, 2012.
Applicants filed further additional authorities on December 26, 2012. The
Commission will grant the motions and consider the additional authorities.
Three
motions to strike remain pending. The Office of the Public Counsel (“OPC”) raised
the latest motion to strike in its post hearing brief. The Commission denies
that motion as an untimely objection to testimony. MECG filed the first motion
to strike and
the second motion to strike,
Staff joining in the latter. The first and second motions to strike addressed
KCPL’s proposed tariffs and supporting testimony for an interim energy charge
(“IEC”). The Commission will deny the first and second motions to strike as
moot because the IEC claim is among the issues that the parties have settled.
III. Settlements
A contested case allows for waiver
of procedural formalities
and a decision without a hearing,
including by settlement.
The parties filed stipulations and agreements as follows.
|
ER-2012-0174
and ER-2012-0175
|
|
Partial
Nonunanimous Stipulation and Agreement Respecting Kansas City Water Services
Department and Airport Issues
|
October
19
|
|
Non-Unanimous Stipulation and Agreement as to Certain Issues
|
October
19
|
|
Non-Unanimous Stipulation and Agreement Regarding Low-Income
Weatherization and Withdrawal of Objection and Request for Hearing
|
October 26
|
|
Non-Unanimous Stipulation and Agreement Regarding Praxair, Inc., Ag
Processing Inc a Cooperative and the Midwest Energy Users' Association's
Objection and Withdrawal of Objection and Request for Hearing
|
October 29
|
|
ER-2012-0174
|
ER-2012-0175
|
|
Non-Unanimous Stipulation and Agreement Regarding Class Cost of
Service / Rate Design
|
October
29
|
Non-Unanimous Stipulation and Agreement Regarding Class Cost of
Service / Rate Design
|
October
29
|
|
Second
Non-Unanimous Stipulation and Agreement as to Certain Issues
|
November
8
|
Second
Non-Unanimous Stipulation and Agreement as to Certain Issues
|
November
8
|
Also, in File No. ER-2012-0175, Staff filed its Exhibit No. 392,
which is the stipulation and agreement in File No. EO-2012-0009. That action
addressed issues under the Missouri Energy Efficiency Investment Act (“MEEIA”)
and the settlement resolves all MEEIA issues. Of those stipulations and
agreements, only the Non-Unanimous
Stipulation and Agreement Regarding Class Cost of Service / Rate Design in
File No. ER-2012-0174, remains opposed and so constitutes the signatories’
position statement on an issue to be tried.
All other stipulations and agreements (“settlements”) are unopposed,so the Commission will treat the settlements as unanimous.
The settlements address the accounting
authority order application that was the subject of File No. EU-2012-0130,
consolidated into ER-2012-0174, and other claims and defenses in File Nos.
ER-2012-0174 and ER-2012-0175. On the matters disposed of by settlement, no
party seeks an evidentiary hearing, so no hearing is required, and
the Commission need not separately state its findings of fact.
Nevertheless, applicants have the burden of proving that increased rates are
just and reasonable.
Except as otherwise provided by statute, the preponderance of the evidence,and
reasonable inferences from the evidence, guide each
determination.
The Commission’s review of the
record shows that substantial and competent evidence weighs in favor of the
settlements’ provisions as follows.
A.
Standard for Service
The standard for service is that Applicants
must provide “service instrumentalities and facilities as shall be safe and
adequate [.]”
Upon review of the record and the settlement, the Commission independently
finds and concludes that the settlement’s proposed terms support safe and
adequate service. Without further discussion, the Commission incorporates such
terms, as if fully set forth, into this report and order.
B.
Standard for Rates
The standard for rates is
“just and reasonable,”
a standard founded on constitutional provisions, as the United States Supreme
Court has explained.
But the Commission must also consider the customers.
Balancing the interests of investor and consumer is not reducible to a single
formula, and
making pragmatic adjustments is part of the Commission’s duty.
Thus, the law requires a just and reasonable end, but does not specify a means. The Commission is charged with approving rate
schedules that are as “just and reasonable”
to consumers as they are to the utility.
Determining
whether an increase is necessary requires comparing the companies’ current net
income to the companies’ revenue requirement. Revenue requirement is the amount
of money necessary for providing safe and effective service at a profit. Those needs
are tangible and intangible.
The Commission determines the revenue requirement from a conventional analysis
of the resources devoted to service.
To
provide service, a utility devotes its resources, which accounting conventions
classify as either investment or expense as follows.
· Investment
is the capital basis devoted to public utility service (“rate base”) on which
the utility seeks profit (“return” on investment).
o
Return is therefore a percentage (“rate of return”)
of rate base.
o
Rate base equals capital assets (“gross plant”), minus
historic deterioration of such assets (“accumulated depreciation”), plus other
items.
· Expenses
include operating costs, replacement of capital items as they depreciate
(“current depreciation”), and taxes on the return.
Those components relate to each other in the following formula:
·
Revenue Requirement = Expenses + (Return
x Rate Base)
·
Rate Base = Gross Plant –
Accumulated Depreciation + Other Items
· Expenses =
Operating Costs + Current Depreciation + Taxes
The rate of return depends on the
cost of each component in the utility’s capital structure.
But
determining the revenue requirement is not the entire analysis. The utility
collects its revenue from its customers, who are not all the same, and so need not—and
sometimes should not—receive the same treatment. The treatment afforded among
the various classes of customers is rate design. Rate design should reflect the
costs attributable to serving each class of customer respectively.
Accordingly,
just and reasonable rates may account for such differences among customers.
C.
Conclusion as to Matters Settled
Under those standards of
law and policy, the Commission has compared the evidence on the whole record
with the settlements. The Commission independently finds and concludes that the
terms proposed in the settlement support safe and adequate service at just and
reasonable rates. Therefore, the Commission will incorporate the settlements’
provisions into this report and order, either as the Commission’s rulings or,
for those matters to which the parties agreed but the Commission has no
authority to order, as the Commission’s consent order.
IV. Matters not Addressed
in Settlements
The Non-Unanimous Stipulation and Agreement Regarding Class Cost of Service
/ Rate Design in File No. ER-2012-0174 remains subject to opposition from
OPC, AARP, and Consumers Council of Missouri, Inc. and so constitutes the
position statement of the signatories.
The Commission consolidated the
actions in File Nos. ER-2012-0174 and ER-2012-0175 for hearing on the remaining
disputes regarding the test year, updates, and related matters. The
Commission set the evidentiary hearing for October 17, 19, 22, 23, 24, 25, 26,
29, and 30, 2012. The parties stipulated to the admission of certain exhibits
without objection and all such exhibits are admitted into the record. The
parties filed initial briefs and reply briefs as set forth in Appendix B.
Bearing in mind the standards of
law and policy set forth above, the Commission makes conclusions of law on the matters
not disposed of in the settlements, with separately stated findings of fact on
those remaining in dispute, as follows.
The following
matters are common to both KCPL and GMO.
AARP and Consumers
Council of Missouri, Inc. (“CCoMo”)—entities that advocate for residential
customers—Staff, and OPC ask the Commission to put their dispute in perspective
as follows.
Findings
of Fact
1.
Missouri’s economy suffered more and is
recovering more slowly than the rest of the nation’s economy, expressed as
gross domestic product, with 100 as the start of the downturn, as follows.
|
GDP
|
Nation
|
State
|
|
Lowest
point
|
95.3
|
91.9
|
|
June 2012
|
101.2
|
94.4
|
Adjusted for inflation
(“real GDP”), in 2011, the nation grew by 1.5% and Missouri grew by 0.04%
2.
In 2010, the
unemployment rate in the KCPL service area reached 9.8%. In 2011, all
the counties that GMO serves had higher unemployment rates than in pre‑recession
2007.
3.
Between 2007 and 2011,
the Consumer Price Index (“CPI”) increased 11.58%. During that same
time period, Applicants’ customers have experienced the following increases in
electric rates and weekly wages (expressed as percentages).
|
|
Average
Weekly
Wages
|
Electric
Rates
|
|
KCPL
|
|
|
11.45
|
43.80
|
|
GMO
|
|
MPS
|
11.80
|
32.13
|
|
L&P
|
14.72
|
46.14
|
Discussion
The parties
offering these matters do so as a factor affecting other matters in these
actions, but seek no conclusions of law or ruling on them, so the Commission
will make none.
ii. Return on Equity
The Commission is
setting Applicants’ return on common equity, also called return on equity, (“RoE”)
at 9.7%. Because RoE is so important in determining Applicants’ rates, the
Commission sets forth it determination on RoE first. That primacy in this
report and order does not reflect an absence of other considerations, like
capital structure, that influence RoE. Many are the issues affecting an
appropriate RoE:
Determining
a rate of return on equity, however, is imprecise and involves balancing a
utility's need to compensate investors against its need to keep prices low for
consumers. []
The Commission’s determination stands on evidence for which the foundation is unchallenged, and
objections therefore waived, including the qualifications of any witness to
offer an opinion as an expert.
As to each expert's testimony, the Commission may believe
all, part, or none.
The most convincing evidence and argument is reflected in the Commission’s
findings of fact, as follows.
Findings
of Fact
1.
Return on equity (“RoE”) influences the amount
that a stock issuer pays to an investor, so it is a major factor in how much an
investor is willing to pay for the stock. Applicants do not issue their own
equity and debt. GPE issues debt and equity in Applicants’ names.
2.
To simulate an RoE for Applicants requires
economic modeling. An accurate model requires
accurate data, which means recent measures of comparable companies’ earnings
potentials and risks.
3.
The three most commonly used economic models
for simulating RoE are Risk Premium, Capital Asset Pricing Model (“CAPM”) and
Discounted Cash Flow (“DCF”).
4.
Risk Premium considers that debt is less
risky than equity, so stock issuers must offer a premium to attract investors
over bonds. Generally, the risk premium is the difference between cost of debt
and return on equity. But return on equity is less subject to market forces for
a regulated utility as it is for other businesses.
5.
CAPM focuses on the degree of risk that
distinguishes one investment from another. CAPM multiplies degree of risk (from
standard references) times the risk premium (calculated as the difference
between stock and a risk-free investment like a United States Treasury bond)
and adds the risk-free rate to determine RoE.
6.
DCF models posit that a stock’s price equals
the cumulative present value of the dividends per share that the stock will pay
out for the indefinite future, discounted for a present value. The discount
rate is the investors’ cost of equity for that stock, which is the competitive
market return that investors find acceptable to hold or purchase that stock. It
can be calculated as the stock’s current dividend yield (as directly and
precisely observed) plus the long term dividend growth rate (which must be
estimated). Normally, this growth rate is assumed for simplicity to be
constant, but in some applications it is assumed to change over time (e.g., the
two-stage DCF).
7.
The DCF formula focuses on current stock prices and dividends, consequent
current dividend yields, and predicted growth rates as follows:
RoE = current dividend x (1+long-term
dividend growth rate) + long term dividend growth rate
stock
price 2
For those factors, current conditions are as
follows.
|
Factor
|
Conditions
|
|
current stock
dividends and prices
|
prices higher than
dividends
|
|
predicted growth rates
|
Low
|
|
consequent current
dividend yields
|
Lower
|
8.
The best DCF analysis includes
long-run investor expectations calculated by “sustainable” or earnings
retention growth rates. Alternatives include published analyst earnings
projections and historical trends. But projections may be overstated and are not necessarily
reliable; and the most recent historical trend data
is less useful than in the past due to recent economic disruptions.
9.
From 2001 through 2012, capital costs have
generally declined. Early in that
period, utility bond yields averaged about 8% and 10-year Treasury yields about
5%. By 2011, those bond and Treasury yields had declined to 5.1% and 2.8%,
respectively. In 2012, yields declined even further, to near or below the
lowest levels in decades.
10.
The reasons are several.
The U.S. Treasury and the Federal Reserve Board bought U.S. government debt,
which deflates interest rates. Other factors pushing interest rates down
include low inflation rates and slow economic growth. None of those phenomena
will end any time soon. That trend manifests in low inflation
rates, and low ten-year Treasury yields, 3-month Treasury bill yields, and
Moody’s Single A yields on long-term utility bonds.
11.
These disruptions also make Risk Premium and
CAPM useful only as a check on the results from DCF analysis. The results from DCF analysis decrease when
investor expectations decrease, which happens
when interest rates decrease.Therefore, as
a result of current economic conditions, RoE awards have trended lower,
as shown by the national averages of other
state commissions’ awards:
|
Period
|
Average
|
|
2011
|
10.22
|
|
2012 first quarter
|
10.84
|
|
2012 second quarter
|
9.92
|
|
2012 third quarter
|
9.78
|
|
2012 first nine
months
|
9.97
|
12. For future economic growth under DCF analysis, the best
measure is gross domestic product (“GDP”) plus inflation (“nominal GDP”). The
best projections of nominal GDPs are:
|
Year
|
Percent
|
|
2012
|
3.9%
|
|
2013
|
4.1%
|
|
2014-15
|
5.1%
|
|
2018-23
|
4.7%
|
13.
Currently, and for the
foreseeable future, utility equity investors are accepting yields considerably
lower than they have in the past. Nevertheless, returns on
electric utility stocks are relatively stable and Applicant’s business risk has not increased since the Commission set
Applicants’ RoE at 10.0% on April 27, 2011. GPE’s relatively strong capital
structure supports a lower RoE for Applicants.
14.
An RoE of 9.7 is enough
for both KCPL and GMO to continue operating and to attract investment.
Conclusions
of Law
Applicants have not
carried their burden of proving that their RoE should be in the range they
propose and, of all parties’ evidence
and argument, the single most persuasive is that of
the federal executive agencies (“FEAs”), entities within the United States’
government that are customers of Applicants.
The parties sponsored witnesses
testifying to RoE
ranges and recommendations as follows.
|
Sponsor
|
Range
|
Recommendation
|
|
Staff
|
8.00 to 9.00
|
9.00
|
|
OPC
|
9.10 to 9.50
|
9.40
|
|
FEAs
|
8.80 to 9.80
|
9.50
|
|
Applicants
|
9.80 to 10.30
|
10.30
|
Of
the ranges supported by expert testimony, the authorized RoE is:
·
within the FEAs’,
·
between OPC’s and Applicants’, and
·
outside Staff’s,
as
follows.
|
|
FEAs
8.80 to 9.80
|
|
|
Staff
8.00 to 9.00
|
|
OPC
9.10 to 9.50
|
|
Authorized
9.70
|
|
Applicants
9.80 to 10.30
|
|
|
|
|
|
|
|
|
The Commission will discuss the parties’ cases in the
following order:
·
The FEAs first because
their case is the most persuasive,
·
Applicants and OPC next
because their experts’ analyses bracket the authorized RoE, and
·
Staff last because its
expert’s range is the outlier.
FEAs. The
FEAs suggest a range of 8.8% to 9.8%, which includes the authorized RoE of
9.7%. The Commission finds their analysis the most persuasive for several
reasons. The FEAs’ expert used the Applicants’ first proxy group
and so begins his analysis on the same footing. For growth projections, the
FEAs’ expert employed multiple sources of published projections, but did not
rely on these alone, resulting in a more thoroughly researched result. The
FEAs’ expert also generously considered potential future earnings
growth contribution from issuance of new common stock at prices above book
value.
Applicants. Applicants suggest a range of 9.80% to 10.30%. In
support of that range, Applicants offer several standard analyses, and one
non-standard analysis, but all the results are exaggerated because of the
values that Applicants use in the formulas.
Applicants’
proxy group changed between the filing of their direct testimony and rebuttal
testimony. The second group omitted three of the companies with the lowest RoE,
while retaining the three companies with the highest RoE, and adding companies
with higher-than-average RoEs. Inevitably, that raises the resulting RoE.
Also
troubling is the DCF Terminal Value model that Applicants offer. DCF analyses
look at long-term events but DCF Terminal Value looks at just four years. It is
a new approach to DCF and is not in general use. Also, the proffered analysis
is flawed. The DCF Terminal Value analysis stands on the premise that current
low interest rates make debt less attractive to investors, who therefore invest
in stocks at prices higher than usual. The analysis assumes that investors will
pay a price-to-earnings (“P:E”) ratio of 16:1 through 2016. But the analysis
also claims that interest rates will soon rise, which will send investors back
to debt instruments and away from stocks, undercutting the 16:1 P:E ratio on
which the analysis relies.
Further, all
Applicants’ DCF analysis share certain flaws. They use a 5.7% GDP projected
from 1971-1980 data, which is not helpful compared to the 30 most recent lower
growth years, and does not reflect investor expectations. Nor does that rate
account for events likely to shape GDP in the future. Given the economic
conditions currently prevailing, it is not credible that investors today use a
5.7% GDP to assess their expectations for low-risk investments.
Moreover,
Applicants’ attempt to adjust for the economic intervention of the U.S.
Treasury and the Federal Reserve Board that is lowering interest rates
undercuts the DCF model itself. To an investor, a decrease in return figures
into the price investors will pay for an investment only because it is a
decrease, and the reason for the decrease is irrelevant whatever the cause. The
markets are not wrong— RoE cannot increase when risk has not increased and
capital costs have decreased.
Thus,
Applicants’ DCF analyses (other than Terminal Value) are sound but the
variables employed exaggerate the results. Therefore, the Commission rejects
Applicant’s suggested range of RoEs. Nevertheless, the Commission notes that Applicants’
second proxy group has a median RoE of 9.8 percent, which is just above the
authorized RoE of 9.7%.
OPC. Just below the authorized RoE is
the analysis of OPC’s witness. OPC’s witness offers a range of 9.1% to 9.5%,
based on investor expectations of both short-term growth and
long-term sustainable growth, therefore employing multi-stage DCF analysis, which thus constitutes a
thorough consideration. The Commission finds the analyses slightly too
cautious, resulting in results too modest, so the Commission rejects it.
Nevertheless, the Commission notes that, accounting more fully for the inverse
relationship between risk premiums and interest rates OPC’s expert analysis
results in a range that includes the authorized RoE of 9.7%.
Staff. Staff suggested one range
at hearing and another in briefing, but neither is entirely persuasive for the
following reasons.
At hearing, Staff offered a range of
8.00% to 9.00%. In support of that range, Staff offers data from the period between 1968 and 1999. After that period,
Staff alleges, industry disruptions make data unreliable, and an earlier period
analogous to recent years more useful. Those arguments do not persuade the
Commission that data from a remote period starting 44 years ago is more
reliable for determining recent RoE than more recent data. Therefore, the Commission rejects the 8.00% to 9.00%
range.
In briefing, Staff argues for an expanded range of 8.00% to 9.78%. The new
upper end comes from a variety of sources including the downward trend in national averages of other state commissions’ RoE awards as the Commission
has found:
|
Period
|
Average
|
|
2011
|
10.22
|
|
2012 first quarter
|
10.84
|
|
2012 second quarter
|
9.92
|
|
2012 third quarter
|
9.78
|
Those numbers are relevant, not because any other RoE
ruling on different facts and different law helps calculate Applicants’ RoE,
but because Applicants must be able to attract capital. An RoE set too low
will, as discussed above, unlawfully handicap Applicants when they compete for
capital in the national marketplace.
Staff cites
the 2012 third quarter amount—9.78%—for the high end of its expanded range. But
the lower end of the expanded range comes from the
discredited data discussed in the preceding paragraph. For that reason, the Commission does not entirely embrace the expanded
range for RoE.
Nevertheless,
the Commission notes that the authorized RoE is well within the upper end of
Staff’s expanded range.
Zone of Reasonableness. The national
marketplace is also among the factors that help the Commission establish a zone
of reasonableness for Applicants’ RoE. Based on the downward trend in national averages of other
state commissions’ RoE awards, the continuing downward pressure on interest
rates nationally, the slower-than average recovery in Missouri, and the copious
testimony of the many experts, the Commission has found a reasonable
opportunity for Applicants to earn a reasonable return on their investment exists
at 9.7%.
The Commission’s Ruling. In proposing
an RoE for Applicants, all experts agree that setting an RoE is not merely a
matter of arithmetic. RoE is a multi-disciplinary exercise culminating in the
application of the Commission’s policy expertise. The factors influencing an RoE
are legion, balancing or outweighing one another in permutations too numerous
for any expert to fully catalogue, and growing exponentially as experts compare
each others’ models.
Among those
myriad factors, the testimony indicates that a lower RoE may be appropriate for
a utility that has an FAC like GMO than for a utility that does not have an FAC
like KCPL, all things being equal. But no witness quantifies a difference
between the Applicants, which implies that all things are not equal, and that
other factors outweigh the distinction of the FAC, and support the same RoE for
KCPL as for GMO: 9.7%.
An RoE of
9.7% lies within the zone of reasonableness as determined by the courts of
Missouri and the United States. It will also allow Applicants to compete in the
market for capital that they need to maintain their financial health, without
raising rates unnecessarily. Therefore, the Commission concludes that an RoE of
9.7% for each of the Applicants will best support safe and adequate service at just
and reasonable rates, and the Commission will order that RoE.
The Commission is
ordering a capital structure reflecting GPE’s actual capital structure for each
Applicant.
Findings
of Fact
1.
As of August 31, 2012, GPE’s capital
structure is 46.84 % debt to 53.16% equity (52.56% common
and 0.60% preferred).
2.
Ordinarily, capital structure excludes
short-term debt and includes long-term debt. GPE is re-financing long-term debt
with short-term debt. The short-term debt excluded from GPE’s capital structure
is thus a temporary substitute for long-term debt. This makes the capital structure more equity-rich, which is
more expensive. But GPE is consolidating the
short-term debt for re-financing back into long-term debt which is likely to attract more buyers and cost less in
interest.
3.
GPE’s capital structure also excludes other
comprehensive income (“OCI”), which is ordinarily included in equity.
Discussion,
Conclusions of Law, and Ruling
Applicants have
carried their burden of proving that the actual capital structure of GPE as
described by Applicants is more likely to support just and reasonable rates
than the proffered alternatives. But the FEAs have shown that the capital
structure should include Other Comprehensive Income (“OCI”) in equity.
OPC and MECG argue
for a hypothetical capital structure of 50% debt to 50% equity. In support,
they cite the exclusion of short-term debt because it is a temporary stand-in
for long-term debt, which is ordinarily included in capital structure. The
argument for including the short-term debt is not without merit. But its
proponents have not shown how including short term debt leads to the structure
of 50% debt to 50% equity. Nor have they shown how much of the shift should
come from preferred equity. Their proposal lacks evidentiary support and adopting
it would be merely arbitrary.
The FEAs challenge
Applicants’ exclusion of OCI. Applicants argue that, while OCI is ordinarily
part of equity, the relevant periods’ OCI is more accurately allocated to debt
because it comes from settled interest rate derivatives’ unamortized net-of-tax
income or loss. Applicants cite no provision of USoA supporting that
adjustment, so they have not carried their burden of proof on that issue.
Therefore, the Commission will order that OCI shall be part of equity.
The Commission concludes
that safe and adequate service at just and reasonable
rates has better support in a capital structure for
each Applicant at the actual capital structure of GPE as Applicants describe it—46.84
% debt to 53.16% equity (52.56% common and 0.60% preferred)—but including OCI,
so the Commission will order that capital structure.
The Commission is
ordering that GPE’s consolidated cost of debt be assigned
to Applicants at 6.425% and is not ordering the reductions in interest suggested
by Staff.
Findings
of Fact
1.
Aquila committed to
assess debt costs to Missouri ratepayers at a rate consistent with a "BBB" credit rating. Aquila lost its investment grade credit
rating and had to take on higher-cost debt.
2.
When GPE acquired Aquila,
now known as GMO, it boosted GMO’s credit rating by guaranteeing its debt. As of July 2, 2012, all
the Aquila high-cost debt is gone from GMO’s
books. GMO
now has an investment grade credit rating. But GMO does not have
ratings as high as KCPL, so GMO still pays more interest than Aquila promised
to pass on to ratepayers, and more interest than KCPL has to.
3.
GPE’s consolidated cost
of debt is 6.425%.
Discussion,
Conclusions of Law, and Ruling
Applicants and Staff agree that the Commission
should assign GPE’s consolidated cost of debt to each Applicant, and GPE’s
practice of issuing securities in Applicants’ names supports that practice.
Staff argues that the Commission should order each
Applicant’s consolidated cost of debt to be 6.187% by reducing GPE’s notes as follows:
|
GPE
Note
|
Recommended
Reduction in
Basis Points
|
Basis
Point
Estimate
|
|
$250
million, 3-year, 2.75%
|
60 to 75
|
65
|
|
$350
million, 10-year, 4.85%
|
60 to 85
|
65
|
|
$287.5 million, 10-year,
5.292%
|
110 to 120
|
115
|
In support, Staff argues that its adjustments align GMO’s cost of debt
with KCPL. KCPL’s rating, Staff argues, would also be GMO’s but for the misdeeds
of Aquila. Hence, this is one of several Aquila legacy matters.
Staff’s arguments are unpersuasive. Their basis—what GMO
would look like if the past were different—is speculation. By contrast, no
party disputes that GMO’s ratings have improved under current management. And
using GPE’s consolidated cost of debt is more consistent with the capital
structure that the Commission has ordered, which is based on GPE’s actual
capital structure.
Though
succeeding to assets generally means succeeding to liabilities, for Missouri
citizens it also means the rescue of a distressed utility and preservation of service.
Those considerations suggest that the Commission’s treatment of GMO should not stray
too far into punitive action. The Commission
concludes that a cost of debt at 6.425% will better support safe and adequate
service at just and reasonable rates.
Therefore,
the Commission concludes that a cost of debt for each Applicant at 6.425%, and without Staff’s proposed adjustments, will better support safe
and adequate service at just and reasonable rates, so the Commission will order
that cost of debt for each of the Applicants.
Applicants have not
carried their burden of proving that the Commission should order deferred
recording (“a tracker”) for transmission costs. The issue is moot because Applicants
can already determine how to record that cost by themselves, as they do with
almost every cost every day, under the Uniform
System of Accounts (“USoA”).
Findings
of Fact
1.
Applicants pay to send and receive power
(“transmission”) through the territory of regional transmission organizations
including the Southwest Power
Pool ("SPP"). The costs for transmission include:
|
Name
|
USoA
Account
|
|
Transmission
Costs
|
565
|
|
Schedule
1-A Administration Charge
|
561 and 575
|
|
Schedule 12 Assessment Fees
|
928
|
2.
SPP’s regional transmission upgrade projects and
increasing SPP administrative fees are increasing Applicants’ transmission costs as follows.
|
Calendar
Year
|
Cost ($
million)
|
|
KCP&L
|
GMO
|
|
2012
|
$18.4
|
$6.8
|
|
2014
|
$25
|
$9.2
|
|
2019
|
$45.2
|
$16.7
|
Those increases
represent an approximately 14% increase per year. Each
of those amounts represents more than five percent of the respective
applicant’s income, computed before those costs.
4. Transmission
costs will continue to increase at an accelerating pace.
Discussion,
Conclusions of Law, and Ruling
The
Applicants ask the Commission to order deferred recording
(a “tracker”) for transmission costs. But that matter is moot because the Commission
can grant no practical relief.
No practical relief is possible because Applicants can already “track”
transmission cost increases under the plain language of the only authority that
any party cites for a tracker.
That authority is
the Uniform System of Accounts
(“USoA”), which is the set of federal regulations that governs utilities’
recording of gains and losses (“items”). 18 CFR 201. The Commission’s regulation
4 CSR 240-40.040(1) incorporates USoA’s General
Instructions, Definitions, and Balance Sheet Accounts Assets and other
Debits (“Accounts”) into the
Commission’s regulations. 4 CSR 240-40.040(1). Specifically applicable are Accounts 182 and 254, other regulatory liabilities and assets,
respectively, set forth at length in Appendix C. Those provisions describe
accounts for recording an item outside the year of occurrence (“deferral”) for
determination in a later action.
Whether a utility
may defer an item is the subject of General Instruction No. 7. General
Instruction No. 7 provides that the Commission’s order is
only necessary for an item that is less:
. . . than
approximately 5 percent of income, computed before extraordinary items.
Commission approval must be obtained to treat an item of less than 5 percent,
as extraordinary. []
“Extraordinary” describes
matters subject to deferral, and does not apply to transmission cost increases,
as discussed below. But even if transmission cost increases were extraordinary,
Applicants’ evidence shows that transmission costs are not less than five percent
of income. Therefore, no Commission order is needed to defer the transmission
costs, and Applicants can decide for themselves whether to defer the
transmission costs.
Whether to defer an item is a decision that Applicants make
every day because it is simply a matter of recording. Recording any item ordinarily
means assigning it to the year in which it occurred (“the period”):
[N]et income shall
reflect all items of profit and loss during the period with the
exception of [certain items.]
And:
All other items of profit and
loss recognized during the year shall be included in the determination
of net income for that year. []
But, if an item with
far-reaching impact for Applicants and their customers falls outside the test
year, omitting that item from consideration may threaten just and reasonable
rates. To protect just and reasonable rates, the Commission allows deferral
for:
Extraordinary
items. . . . Those items related to the effects of events and
transactions which have occurred during the current period and which are of
unusual nature and infrequent occurrence shall be considered
extraordinary items. Accordingly, they will be events and transactions of
significant effect which are abnormal and significantly different from the
ordinary and typical activities of the company, and which would not reasonably
be expected to recur in the foreseeable future [.]
That language examines an event’s:
· Time
(during current period);
· Effect
(significant);
· Rarity
(unusual, infrequent, not foreseeably recurring, activities abnormal and
significantly different from the ordinary and typical).
Applicants have not proved
that the transmission cost increases meet that standard. The projected
transmission cost increases are not “extraordinary” within the legal definition
because they are not rare or current.
“Rare” does not describe cost increases in the utility
business generally. Specifically, Applicants’ evidence shows the following as
to transmission. Transmission is an ordinary and typical, not an abnormal and
significantly different, part of Applicants’ activities. Also, Applicants
showed that paying more for transmission than in the previous year is a foreseeably
recurring event, not an unusual and infrequent event. Thus, “items related to
the effects of” transmission cost increases are not rare and, therefore, are not
extraordinary.
As to time, Applicants project increases on a yearly basis
so each projection will apply to its respective “current period [.]” But no
party cites any authority under which the Commission may order deferral of an item
before the item occurs. And that predetermination—a ruling on facts that have
not occurred—is what makes a “tracker” different from an accounting authority order
under USoA’s plain language. Thus, “items related to the effects of” future transmission
cost increases are not current and, therefore, are not extraordinary.
Because Applicants have not shown that the projected transmission
increases are current and will be rare, Applicants have not carried their
burden of proving that the projected transmission increases are extraordinary. If
the increases—once they happen—prove to be less than five percent of income,
Applicants may apply for an accounting authority order under the law they cite.
If the projected transmission increases prove to be more than five percent of
income, they will be subject to deferral without the Commission’s order.
Either way, the law provides a “regulatory
mechanism to ensure that increasing SPP transmission expenses between
rate cases are appropriately deferred for possible recovery in
a future rate proceeding.” The only
thing that the Commission is denying Applicants is a blessing upon the treatment
of facts that have not yet occurred, an order for which Applicants cite no
authority in the law. Whether the Commission can create a transmission tracker
by regulation, or the General Assembly can create a tracker by legislation, or
some other jurisdiction has already done either, does not change the result.
For
those reasons, the Commission concludes that denying a tracker is consistent
with the law and does not threaten safe and adequate service at just and
reasonable rates, so the Commission will not order a transmission tracker.
The Commission is changing Applicants’ respective rate designs to
bring certain classes of customer closer to paying the cost of serving them
(“recovery”). The Commission:
· Is not eliminating and not freezing Applicants’ residential space-heat
classes.
·
Is shifting
KCPL’s costs of service away from small and general service rates and toward
large power service as OPC proposes.
·
Is increasing KCPL’s first blocks of the
residential space heating rates and winter All-Electric General Services rates,
and GMO’s non-residential and residential rates, as Staff proposes.
·
Is not implementing the
increasing residential true-up revenues by the additional
1.00%, with
a corresponding equal-percentage revenue neutral decrease in the true-up revenues for all other non-lighting rate
classes, proposed by signatories to
the Non-Unanimous Stipulation and
Agreement Regarding Class Cost of Service / Rate Design in File No.
ER-2012-0174.
·
Is not raising any monthly
customer service charge.
The Commission bases those determinations on the
credibility of the witnesses supporting the class cost of service studies
(“CCoSSs”) and other evidence, and the Commission’s policy choices that,
together, suggest relief as follows.
Findings of Fact
1.
All of Applicant’s
customer classes recover their costs but some recover more than others.
Recovery is among the focuses of experts in rate design because how much one
class recovers determines how much other classes must recover. That creates the
mechanism for one class to subsidize another, the use of which experts in rate
design determine based on economic conditions, including those described in
section IV.A.i of this report and order.
2.
Because winter is Applicants’ off-peak season, certain of Applicants’ rate schedules recover less than their class’s cost of service. Those
schedules are, for KCPL:
· Residential
general use and space heat – one meter (“RESB”),
· Residential general use and space
heat – two meters separately metered, space
heat rate (“RESC”),
· All-electric Small General Service (“SGS”), and
· All-electric Medium General Service (“MGS”);
and for GMO:
· Residential service with space heating (“L&P MO 920 rate schedule”),
· Residential
space heating / water heating – separate meter (“L&P MO 922 Frozen rate
schedule”), and
· Non-residential space heating/water heating
– separate meter (“L&P MO 941 Frozen
rate schedule”).
3.
For
example, KCPL’s RESB generates a 5.859% return in the summer, but only 2.922%
in the winter, and RESC generates 4.161% in the summer and only 2.284% in the
winter.
4.
Nevertheless, those
rates recover their costs of service over the course of a year, do not constitute
a discount or promotion, and do not constitute a subsidy of all‑electric
and space heat customers.
5.
If residential space
heat rates were eliminated or priced out of the market, Applicants would lose
part of their winter load, and the profit margin it represents. To maintain
their profitability, Applicants would have to seek that margin through other rates.
6.
For example, a typical KCP&L customer’s bill would increase 24.83%. A
typical GMO’s L&P customer’s
bill would increase 12.58%. For GMO’s
space heating customers, $50.88 per
year at the low-use end and $674.88 for customers
at the higher usage level of 4,000 kilowatt hours per month, or 17.53%. Those increases do not consider any
increase ordered in this action.
7.
To freeze a rate is to close it to new
customers. Frozen rate tariff language has proven to be difficult to draft and
administer for other services. Such a tariff has caused confusion among the
utility, customers, and the Commission. The result was multiple customer
complaints and litigation.
8.
On a scale in which 1.0 represents KCPL’s system-average rate of return, KCPL’s rate classes
contribute to KCPL’s rate of return as follows.
|
Residential
|
0.98
|
|
Small General Service
|
1.98
|
|
Medium General Service
|
1.28
|
|
Large General Service
|
1.05
|
|
Large Power Service
|
0.54
|
9.
KCPL devotes $431,849,089 of its rate base to its Large Power Service (“LP”),
which generates a 3.011% return, compared to the system average return of
5.539%.
10.
Rate design sometimes
employs two components for billing: a periodic customer charge that does not
vary with use, and a volumetric charge that varies with usage. The amount of
service the customer uses determines the volumetric charge, so the volumetric
charge is more within the customer’s control.
Conclusions
of Law
Applicants propose
that any increase awarded in this report and order apply equally to all classes
and rate components, after any adjustment specific to any class, and MEUA-KC
concurs. Staff, OPC, and Southern Union agree, but each adds a set of
adjustments to remedy the disparity in certain classes between costs and
recovery. The parties’ proposals include the following.
·
Eliminate space heat and
all-electric rates (either immediately
or gradually through freezing),
·
Shift revenue among rate
schedules,
and
·
Raise some space heating and
all-electric rates.
Counter-proposals and other matters arise in response. Therefore,
the Commission will order that any increase awarded in this report and order
apply equally to all classes and rate components, after any adjustment specific
to any class, as follows.
Eliminate Space
Heating and All-Electric Rates. Southern Union
d/b/a Missouri Gas Energy proposes eliminating Applicants’ space-heating
classes, either immediately or gradually after freezing those classes. In
support, Southern Union offers several arguments. The Commission rejects that
proposal as follows.
Southern Union
alleges that residential space-heating rates represent an unfair subsidy from
other customers, because they return less than other classes. The Commission
has found otherwise; there is no such subsidy. Contrary to Southern Union’s
allegations, Applicants have shown that elimination of space heating rates
would cause a hardship on Applicant’s customers. Moreover, such hardship would
be even greater under Southern Union’s calculations. Southern Union’s alternative, gradual elimination by freezing space heating
rates, causes its own set of difficulties, as the Commission has learned from
experience.
Southern Union also
argues that residential space-heating rates are a policy relic of an earlier
time, when the Commission favored electricity over natural gas for reasons that
no longer exist, especially price. Southern Union cites the recent drop in
natural gas prices. The Commission is aware of that development but is also
aware of the investment that customers have made in reliance on those
classifications, which represents a commitment that such rates represent among
Applicants, customers, and the Commission. The Commission will not abandon its
part of that commitment.
Southern Union asks whether it is fair that two of
Applicants’ customers pay different amounts for electricity just because one is
all-electric? The answer is yes, if the record supports that result. Even
ignoring Southern Union’s obvious incentive to make electricity less attractive
than natural gas, the Commission concludes that eliminating residential space
heat rates—suddenly or gradually through freezing—does not support safe and
adequate electric service at just and reasonable rates.
Revenue Shift among Rate Schedules. For
KCPL, the low contribution to return of Large Power (“LP”) and high
contribution from Small Gas Service (“SGS”) and Medium Gas Service (“MGS”)
requires a remedy.
Based on KCPL’s
CCoSS, which is in part the basis of the Commission’s findings, OPC proposes to
increase LP as follows. It takes the difference between LP return (3.011%) and
KCPL’s system-average return (5.539%). The difference is 2.528% (5.539% -
3.011%). The amount of LP rate base under-contributing is therefore
$10,917,144. (2.528% x $431,849,089).
Using those
amounts, OPC recommends shifting half the under-contributing LP rate base
($10,917,144 x ½ = $5,458,572) to decrease SGS and MGS by a 69% / 31% split:
$5,458,572 x 69% = $3,319,366 decrease to SGS,
$5,458,572 x 31% = $2,139,206 decrease to MGS,
with the remaining $5,458,572 as an increase to LP.
The results are:
·
LP increases by $5,458,572, which is 50% of KCPL’s CCoSS shifts.
· MGS decreases by $2,139,206,
which is 39% of the LP increase; and
·
SGS decreases by $3,319,366, which is 61% of the LP increase.
The Commission concludes that the shifts that OPC proposes for
KCPL best furthers the policy of moving rates toward recovery. That is because
it represents a middle ground between the undesirable results of the status quo
(leaving disparities in recovery unaltered) and eliminating all disparities
immediately (causing rate shock). The Commission concludes that OPC’s proposal will
best support safe and adequate service at just and reasonable rates, so the
Commission will order the shifts that OPC proposes for KCPL.
Increase Space Heating and All-Electric Rates. In
this matter, the Commission must resolve two policies that, as of this date,
conflict. The general consensus is that a class of customers should pay for the
cost of serving them. But the Commission’s finding on lingering economic
hardships, as set forth in section IV.A.i of this report and order raises a
reluctance to increase rates. This is especially true of residential customers,
who cannot simply pass on the expense to someone else. The Commission is
applying its policy-making expertise by ordering rates altered according to the
proposal of Staff.
Staff proposes to gradually move recovery toward winter costs by
increasing certain rates, in addition to any other revenue increase required by
this report and order, as follows. For KCPL, 5% to
each of the following:
· First winter block of
RESB (residential general use and space heat – one meter); and
· Winter season separately
metered space heat rate of RESC (residential general use and space heat – two meters).
For GMO, 6% to each of the
following:
· L&P MO 920 rate schedule (residential service with
space heating), the two winter energy block rates;
· L&P
MO 922 Frozen rate schedule (residential space heating / water heating –
separate meter), the winter energy rate; and
· MO 941 Frozen rate schedule (“non-residential space heating / water heating
– separate meter”).
OPC concurs as to the KCPL increases. As to all Staff’s
proposed increases, the Commission concludes that safe
and adequate service at just and reasonable rates finds the most support in the
shifts that Staff proposes for KCPL. Therefore, the
Commission will order those increases as Staff recommends.
Additional 1%
for KCPL Residential Rates. The signatories to the KCPL Non-Unanimous
Stipulations and Agreements Regarding Class Cost of Service / Rate Design agree that the Commission
should increase KCPL residential true-up revenues by 1% in addition to any
other increase, with a corresponding equal-percentage revenue decrease in
true-up revenues for all other non-lighting rate classes. OPC objects, and AARP
and CCoMO join in that objection. The objectors are correct that the slow
recovery from economic woes, on which the Commission heard much testimony
during local public hearings, supports no more increase in residential rates
than the Commission has already reluctantly ordered. Therefore, the Commission
will rule in favor of OPC and against the 1% residential increase that OPC
opposes.
Customer Charge OPC asks the Commission that
any increase in residential rates not apply to the monthly customer charge.
AARP and CCoMO concur. Because volumetric charges are more within the
customer’s control to consume or conserve, the volumetric rate is the more
appropriate to increase. Therefore, the Commission will order that any increase
in residential rates should not apply to the monthly customer charge.
Rulings. The Commission concludes that
the grant and denial of rate shifts and increases as described above will best
support safe and adequate service at just and reasonable rates, so the Commission
will order those shifts and increases accordingly.
Staff seeks a
determination that the Commission and Applicants need take no further actions
under certain federal laws. That request has no opposition from any party.
Findings
of Fact
1.
To address the four Energy Independence and Security
Act of 2007 ("EISA") standards, the Commission established
Files No.
a. EW-2009-0290 (“IRP
Docket”);
b. EW-2009-0291 (“Rate
Design Docket”);
and
c. EW-2009-0292 (“Smart
Grid Docket”).
In each of those files, the Commission issued its Order
Finding Consideration / Implementation
of New Federal Standards through Workshop and Rulemaking Procedures Is Required,
stating at page 5:
The Commission has satisfied the requirements for consideration of the new EISA standards, and on the basis of the quasi-legislative
record created in these workshops, the Commission determines that
no comparable standards have been considered that would
constitute prior state action and prohibit the Commission from
taking any further action in relation to the new EISA
standards [.]
2.
The Commission
promulgated a rulemaking in File No. EX-2010-0368, as a result of
which Commission regulations 4 CSR
240-20.093, 20.094, 3.163, and 3.164The rules became effective on May
30, 2011.
3.
The Commission’s
promulgation of a rulemaking revising Chapter 22 Electric Resource Planning
Rules in File No. EX-2010-0254
became effective on June 30, 2011.
4.
The Commission opened
a repository on December 29, 2010, for information concerning the Smart Grid in
Missouri as File No. EW-2011-0175. In File No.
EW-2011-0175, on January 13, 2011,
Staff, filed the Missouri Smart Grid Report Among other things, the Missouri Smart Grid
Report presents issues and
concerns and identifies key issues requiring further emphasis, including Smart Grid deployment, planning, implementation,
cost recovery, cyber security and data
privacy, customer acceptance and involvement, and customer savings and benefits.
It recommends the Commission hold a Smart Grid workshop every six months for information exchange and sharing of best
practices and educational opportunities; and also recommends the Commission open a docket to address cost recovery issues.359
5.
The Commission has also
held Smart Grid conferences on June 28, 2010, and November 29, 2011, and the Smart Grid was also the recent
subject of the PSConnection, a publication of the Commission. On July 17, 2012, the
Commission issued an Order Directing Notice and Directing Filing in File
No. EW-2013-0011 to gather information related to cyber vulnerabilities
and the integrity of the electric utilities’ internal cyber security practices.
This workshop proceeding provides another opportunity for the Commission to explore issues
and take action related to the PURPA Smart Grid Investments standard. The
Commission on October 5, 2012 issued a Notice And Order Setting On-The-Record Proceeding scheduling an on-the-record proceeding in File No. EW-2013-0011 for November 26, 2012
regarding cyber security practices.
6.
In 2009, Governor Nixon
signed Senate Bill 376, the “Missouri Energy
Efficiency Investment Act,” with a stated policy to “value demand-side investments
equal to traditional investments in supply and delivery infrastructure and allow
recovery of all reasonable and prudent costs of delivering cost-effective
demand-side programs.”
7.
The Commission has a
workshop docket, Case No. EW-2010-0187, open to investigate how to achieve its statutory responsibilities under the Missouri
Energy Efficiency Investment Act (“MEEIA”), among other things, within the background of Federal
Energy regulatory Commission (“FERC”) policies
that eliminate barriers to demand response and that direct the Midwest Independent Transmission System Operator (“MISO”) and the
Southwest Power Pool (“SPP”) to accommodate state policy regarding retail
customer demand-side activity.
8.
On
December 22, 2011, KCPL and GMO each submitted a MEEIA
application.
9.
KCPL dismissed its action
on February 17, 2012. The Commission closed
that file on March 6, 2012. Nevertheless, the Commission has in place the framework necessary to make a determination on the associated PURPA
principles.
10.
In GMO’s action, certain
parties filed the Non-Unanimous Stipulation And Agreement Resolving
KCP&L Greater Missouri Operations Company’s MEEIA Filing (“GMO MEEIA settlement”), filed in File No. ER- 2012-0175 as
Exhibit No. 392.
11.
On November 7, 2012, in File Nos. ER-2012-0174 and
ER-2012-0175, the Commission issued an Order
Incorporating Unopposed Non-Unanimous Stipulations And Agreements in
which it incorporated, as if fully set forth at length, the GMO MEEIA agreement as
modified by the October 26, 2012 Non-Unanimous
Stipulation And Agreement Regarding Low-Income Weatherization And Withdrawal Of Objection And Request
For Hearing and October 29, 2012 Non-Unanimous Stipulation And Agreement Resolving
KCP&L Greater Missouri Operations Company’s MEEIA
Filing, among other documents.
12.
On November 15, 2012, the Commission in File No. EO-2012-0009 issued an Order
Approving Non-Unanimous
Stipulation and Agreement Resolving KCP&L Greater Missouri Operations Company’s MEEIA Filing.
Discussion,
Conclusions of Law, and Ruling
The Commission must
consider and determine whether to implement each of the four “new” Public Utility
Regulatory Policies Act of 1978 ("PURPA") Section 111(d) standards for electric utilities
established by Congress through the Energy Independence and Security Act of 2007
("EISA") so as to carry out the purposes of PURPA, which are to encourage:
(1)
conservation of electric energy,
(2) efficiency in
the use of facilities and resources by electric utilities, and
(3) equitable rates
to consumers of electricity.348
If the Commission determines that a standard is appropriate to carry out the above-noted purposes, but declines to
implement it, the Commission must state in
writing its reasons. The law required
the Commission to complete its consideration and determination of each standard
no later than December 19, 2009.
Absent such determination, the
Commission is to consider whether or not it is appropriate to implement such standard to carry out the above noted
purposes in the first general rate
case for each individual electric utility commenced after December 19, 2010. Staff
asks the Commission to consider each standard and make its determination with
respect to Applicants.
PURPA Section
111(d)(16), Integrated Resource Planning Standard as required by Section 532 of EISA,
requires state commission consideration of whether to implement the following:
(A) integrate energy efficiency resources into utility, State, and regional
plans; and
(B) adopt policies establishing cost-effective energy efficiency as a
priority resource.
While not specifically
making a determination to implement PURPA Section 111(d)(16), the Commission has promulgated
rulemakings to address the principles of that
section. Therefore, the Commission concludes that nothing remains for the
Commission to determine in response to
PURPA Section 111(d)(16) for KCPL and GMO.
PURPA
Section 111(d)(17), Rate Design Modifications to Promote Energy Efficiency Investments
Standard as required by Section 532 of EISA, requires state commissions to
consider whether to implement:
(1) removing the
throughput incentive and disincentives to energy efficiency;
(2) providing utility
incentives for successful management of energy efficiency programs;
(3) including the
impact of energy efficiency as one of the goals of retail rate design;
(4) adopting rate
designs that encourage energy efficiency;
(5) allowing timely
recovery of energy efficiency related costs; and
(6) offering energy
audits, demand-response programs, publicizing the benefits of home energy
efficiency improvements and educating homeowners about Federal and State
incentives.
The Commission
concludes that
no further determination is needed in response to PURPA Section 111(d)(17) for
Applicants.
PURPA
Section 111(d)(18), the Smart Grid Investments Standard, requires the Commission to consider
and determine whether the following is appropriate to implement to carry out the purposes of
PURPA:
(A) IN GENERAL – Each State shall consider requiring that, prior to undertaking
investments in nonadvanced grid technologies, an electric utility of the State
demonstrate to the State that the electric utility considered an investment
in a qualified smart grid system based on appropriate factors, including --
(i)
total costs;
(ii) cost-effectiveness;
(iii) improved reliability;
(iv) security;
(v) system performance; and
(vi) societal benefit.
(B) RATE RECOVERY – Each State shall consider authorizing each electric utility of the
State to recover from ratepayers any capital, operating expenditure, or other costs of the
electric utility relating to the deployment of a qualified smart grid system, including a
reasonable rate
of return on the capital expenditures of the electric utility for the deployment of the qualified smart grid
system.
(C) OBSOLETE EQUIPMENT – Each State shall consider authorizing any electric utility or
other party of the State to deploy a qualified smart grid system to recover in a
timely manner the remaining book-value costs of any equipment rendered obsolete by the deployment
of the qualified smart grid system, based on the remaining depreciable life of
the obsolete equipment.
PURPA Section
111(d)(19), the Smart Grid Information Standard, requires the Commission to consider
and determine whether it is appropriate that all electricity purchasers and other interested parties
should be provided access to information from their electricity provider
related to, among other things, time-based prices, usage, and sources of power and type of generation, with
associated greenhouse gas emissions for each type of generation, to the extent such information is available on
a cost-effective basis, so as to
carry out the purposes of PURPA. The standard appears in EISA as follows:
(A) STANDARD. – All electricity purchasers shall be provided direct access, in written or machine-readable form as appropriate, to information from their electricity
provider as provided in subparagraph (B).
(B) INFORMATION. – Information provided under this section, to the extent practicable, shall
include:
(i) PRICES. – Purchasers
and other interested persons shall be provided with
information on –
(I) time-based electricity process in the wholesale electricity market; and
(II) time-based electricity retail prices or rates
that are available to the purchasers.
(ii) USAGE. – Purchasers shall be provided with the number of electricity units,
expressed in kwh, purchased by them.
(iii) INTERVALS AND PROJECTIONS – Updates of information on prices and usage shall be offered on not less than a daily basis, shall include hourly price and
use information, where available, and shall include a day-ahead projection of
such price information to the extent available.
(iv) SOURCES – Purchasers and other interested persons shall be provided annually with written information on the sources of the power provided by the utility, to the extent it can be etermined, by type of generation,
including greenhouse gas missions associated with each type of generation, for intervals during which such information is available
on a cost-effective basis.
(C) ACCESS – Purchasers shall be able to access their own information at any time through the internet and on other means of communication elected by that utility for Smart Grid applications. Other interested persons shall be able to access information not specific to any
purchaser through the Internet. Information specific to any
purchaser shall be provided solely to that purchaser.
The
Commission has established the appropriate avenues for monitoring smart grid
activities and no greater ongoing activity is needed in response to PURPA
sections 111(d)(18) and 111(d)(19).
The following matter
relates to KCPL only, and not to GMO.
·
The Commission is not
ordering procedures and standards in addition to those already provided by law
for examining the prudence of environmental protection measures at Montrose and
La Cygne.
Sierra Club, OPC, and the consumer groups ask the Commission to
order procedures and standards, related to environmental retrofits at
coal-fired plant, in addition to those already existing at law.
Findings
of Fact
1.
When running a power
plant costs more than the revenue it generates, it is time to consider retiring
the plant. Retirement of coal-fired plants is
common for several reasons. The cost of
complying with environmental regulations are rising. Market prices for natural gas and wholesale electricity
are declining. The availability of alternative
resources like renewable energy and energy
efficiency are growing. Those trends make sales of electricity off-system less
profitable.
2.
KCPL owns 50 percent of
the coal-fired La Cygne generating plant. The only other owner of La Cygne is
Westar. That power plant has two units, one of which started operating in 1973
and the other of which started operating in 1977.
3.
KCPL also owns Montrose Generating Station, which consists of three
coal –fired generating units built in
1958, 1960, and 1964
4.
To comply with environmental standards, KCPL
is investing a highly confidential amount in Montrose and approximately $1.23
billion in La Cygne. Of that latter amount, Westar will pay 50 percent to KCPL
when the work is done, which will be approximately June 2015. KCP&L’s 2012
IRP filing addresses the economics of
retrofitting coal units at La Cygne and Montrose versus retiring them.
Discussion,
Conclusions of Law, and Ruling
In support of its
proposed orders for more procedures and standards, Sierra Club alleges that
retrofitting La Cygne and Montrose is economically inefficient, but the
Commission will not pre-determine the prudence of those expenses.
Sierra Club also cites
the possibility of rate shock because the Commission cannot include the
retrofit costs in rates not until that work is done. That is because of an
initiative passed in 1976:
Any
charge made or demanded by an electrical corporation for service, or in
connection therewith, which is based on the costs of construction in progress
upon any existing or new facility of the electrical corporation, or any other
cost associated with owning, operating, maintaining, or financing any property
before it is fully operational and used for service, is unjust and
unreasonable, and is prohibited.
That provision bars construction work in progress (“CWIP”), like
the retrofit, from rate base and makes graduated accommodation nearly
impossible. Sierra Club also cites the possibility of imprudent expenditures. On
those bases, Sierra Club, OPC AARP, and the Consumers Council of Missouri ask
the Commission to prescribe an ongoing formal procedure during retrofitting.
Sierra Club
acknowledges the existence of the Integrated Resource Planning (“IRP”)
procedure, KCPL’s informational meetings with Staff and OPC, and the
Commission’s periodic prudence reviews. Nevertheless, Sierra Club alleges that
some kind of ongoing formal hearing procedure would benefit shareholders and
customers. The cost of such proceedings to rate-payers does not figure into
Sierra Club’s proposal. Absent a full analysis of the effects on ratepayers,
Sierra Club’s proposals are unpersuasive as a matter of fact and policy. Moreover,
no rulemaking, IRP, or prudence review is before the Commission in this
contested case.
The Commission concludes
that the proposed additional standards and procedures do not support safe and
adequate service at just and reasonable rates, so the Commission will not order
the proposed procedures or standards for KCPL in this contested case.
The following
matters relate to GMO only, and not to KCPL.
·
Crossroads: the
Commission is updating, but not changing, the method of valuing amounts to
include in MPS rate base, and exclude transmission costs
·
Off-System Sales: the
Commission is making no ruling because none is sought.
·
FAC: The Commission is
not changing the sharing percentage, ordering flow-through of both gains and
losses for REC flow-through, excluding transmission costs, continuing current
reporting, and ordering new tariff terminology.
The
parties dispute the value for MPS rate base of the Crossroads as to physical
plant, depreciation, accumulated tax set-off and transmission costs. The Commission already ruled on these issues in GMO’s last
general rate action (“previous rulings”), which was in File No. ER-2010-0356.
GMO asks to increase the amounts in rate base attributable to Crossroads.
Dogwood Energy, LLC, (“Dogwood,”) which owns a generating facility), and Staff
oppose that claim. MECG, MEUG, and Ag Processing, Inc. a Cooperative (“Ag
Processing,” a customer) ask to reduce those amounts. No party has shown that
the Commission should change its previous rulings. The Commission incorporates,
as if fully set forth its findings of fact and conclusions of law from the
previous rulings and recapitulates only the most salient facts relevant to
Crossroads’ valuation only as necessary to show how the movants for change have
failed to meet their burden of proof.
Generally. The following matters relate
generally to both valuation and transmission costs.
Findings
of Fact
1.
GMO’s MPS service area receives part of its
power from Crossroads Energy Center (“Crossroads”), a generating facility in
Clarksdale, Mississippi.
2.
In the previous rulings, the Commission
determined that the fair market value of Crossroads was $61.8 million before
depreciation and deferred taxes.
3.
In the previous rulings, the Commission
denied the costs of transmitting power from Crossroads to MPS territory.
Discussion,
Conclusions of Law, and Ruling
The parties may
seek review of matters already determined under the previous rulings before the
current Commission, which may alter those rulings.
Every
order or decision of the commission . . . shall continue in force either for a
period which may be designated therein or until changed or abrogated by the commission
[.]
But even if GMO met its burden of proof, administrative and judicial
economy would support a reservation of ruling in this report and order. That is
because the previous rulings are pending before the Court of Appeals. Departure from the previous rulings before
the Court of Appeals has reviewed them invites confusion and uncertainty to
these matters for all involved.
Plant, Depreciation, Taxes. The
parties dispute the value that Crossroads represents for MPS rate base, including
physical plant, depreciation, and deferred taxes. GMO has not shown that GMO’s
proposed valuation best supports safe and adequate service at just and
reasonable rates. The preponderance of the evidence shows the updated values as
follows.
Findings
of Fact
1.
Crossroads is the property of the City of Clarksdale,
Mississippi. GMO neither owns nor leases any part of Crossroads. GMO has a
capital lease on the power generated at Crossroads that includes the duty to
pay for, and the right to inspect, Crossroads operations.
2.
GMO uses Crossroads power for peak demand in
the summer. Crossroads runs less than half of the summer’s days and has never
run in the winter. Nevertheless, GMO pays for gas to be available in the
winter.
3.
The previous rulings recognized that Crossroads represents some value to GMO
customers, and based valuation upon the market for the same technology, and on GPE’s valuation of Crossroads in filings with the
United States Securities and Exchange Commission (“SEC”).
4.
In a Joint
Proxy Statement/Prospectus and amendments filed with the SEC between May and
August 2007, Aquila (GMO under its previous name and management) and GPE stated
three times that the fair market value of Crossroads was $51.6 million. Aquila
and GPE stated that they based the evaluation on sales of comparable assets.
5.
The
comparable assets were combustion turbines of the same type as those in
Crossroads. Aquila Merchant installed the turbines in two Illinois facilities:
Raccoon Creek and Goose Creek, both of which facilities it sold at a loss.
Aquila Merchant (Aquila’s unregulated affiliate) sold other turbines to
utilities in Nebraska and Colorado at a loss. Aquila Merchant returned the last
of those turbines to the manufacturer and, in so doing, surrendered to the
manufacturer the deposit it had put down on that turbine. Those sales occurred
between 2006 and 2008.
6.
Aquila
Merchant also tried to sell Crossroads, but could come to terms with no buyer,
so it transferred Crossroads to a subsidiary of Aquila. Aquila became
financially distressed and GPE bought it, thus acquiring Crossroads. GPE also
tried, but failed, to sell Crossroads to an outside buyer. GPE sold Crossroads
to Aquila, which it later renamed GMO.
7.
Using the
same valuation principles as in the previous rulings, the value of Crossroads updated as of August 31, 2012, is $62,609,430. Based on a fair market value of Crossroads at $62,609,430, the
applicable depreciation is $10,033,437 and the deferred tax due on Crossroads
is $4,333,301.
Discussion,
Conclusions of Law, and Ruling
The parties agree generally that depreciation
and accumulated taxes must follow the valuation of physical plant.
GMO argues that Crossroads’ rate base
value is GMO’s depreciated net original cost, sometimes called depreciated book
value, of $82.7 million. In support, GMO offers case law from another
jurisdiction,
which states that all evidence bearing on value is relevant, but pre-dating the
Commission regulation that adopts USoA.
USoA defines cost as beginning with the amount incurred by the entity that first
put the asset to public service. GMO relies on Aquila’s building costs, the price in a
transaction between affiliated entities GPE and GMO, and an estimate expressly
designed to justify the price paid in that transaction, none of which are
persuasive.
Holding GMO to those statements
nonetheless, MECG suggests that, if the Commission departs from its previous
rulings, the Commission should embrace the values that GPE and GMO (then
Aquila) assigned in its filings with the SEC.
MECG also cites the Commission’s affiliate transaction rule, which sets
the cost of goods from an affiliate at the
lesser of either (i) fully distributed cost or
(ii) fair market price.
Staff emphasizes fair market price as determined in the previous rulings. Then,
as now, Staff argues, the fair market price is determinable from the sales of
the comparable Raccoon Creek and Goose Creek facilities. The Commission stated:
The ten 75 MW General Electric model
7EA combustion turbines installed at Raccoon Creek and Goose Creek that Aquila Merchant sold to AmerenUE
in 2006 are ten of the
eighteen combustion turbines Aquila Merchant bought at the same time. Four of those eighteen were installed
at Crossroads. The turbines sold at an average installed cost of $205.88 per kW. Based on that average
installed cost of $205.88 per kW, the 300 MW
of combustion turbines at Crossroads would have an installed cost of $61.8
million.
Staff
provides an analysis based on that method in direct testimony on its true-up
accounting schedules. That amount is less than GMO’s cost figure and therefore
controls. In this regard, the arguments for maintaining the status quo analysis
rebuts GMO’s claim for a higher amount in rate base.
Finally, MEUG and Ag Processing succinctly
suggest that the MPS rate base value of Crossroads is zero. The argument has an
elegant simplicity. After all, GMO does not own or lease Crossroads. And constructing
a surrogate value for Crossroads is not the only way to account for the power
that GMO buys from the City of Clarksdale, Mississippi. But the evidence does not weigh in that direction. The
Commission rejected Staff’s argument to disallow Crossroads from rate base
entirely in the previous rulingsbecause
some benefit from distant Mississippi does reach the MPS customers and that
remains true today. Therefore, the Commission will not value Crossroads at
zero.
Crossroads is a relic of the failed
utility Aquila. A full recital of Aquila’s tortured history is unnecessary to
the Commission’s rulings,
because it only raises the issue of how long the Commission will visit the sins
of the predecessor on the successor. It is true that GMO is the same legal
entity as Aquila, but it is also true that management is different.
Therefore,
the Commission will order that the value of Crossroads for GMO’s MPS rate base
shall be $62,609,430
without transmission cost. At that value, GMO and Staff
agree, the accumulated depreciation is $10,033,437 and the accumulated deferred taxes
are $4,333,301.
Those values best support safe and adequate service at just and reasonable
rates for MPS, so the Commission will order those amounts to be included in
GMO’s MPS rate base.
Transmission Costs. GMO asks the
Commission to depart from the previous rulings and include in MPS rates the
costs of transmitting power from Crossroads to MPS territory but it has not
carried its burden of proof on that claim.
Findings
of Fact
1.
Crossroads is 500 miles from GMO’s MPS
territory.
2.
Between the territory of MPS and Crossroads
are the territories of regional transmission organizations (“RTOs”). RTOs
collect payment for the transmission of power through their territories. GMO
does not belong to all those RTOs so GMO must pay higher fees for transporting
power than to an RTO of which GMO is a member.
3.
There are generating facilities closer,
including Dogwood’s facility and the South Harper plant. Even though Crossroads provides power
for GMO only during half of the days in the summer, GMO pays about $5.2 million to transmit power from Crossroads
all year round. The high cost of transmission is not outweighed by lower
fuel costs in Mississippi.
Discussion,
Conclusions of Law, and Ruling
GMO has not carried
its burden of proof on transmission costs. GMO alleges that the lower price of
fuel in Mississippi outweighs the cost of transmission. The Commission has
found that the evidence preponderates otherwise.
GMO also argues
that the Commission must include transmission costs because FERC has approved a
rate for that service. In support, GMO cites opinions providing that the Commission cannot nullify FERC’s rate
or any other FERC ruling.
But as
Dogwood explains, and Staff and MECG agree, those opinions do not bar the
Commission from determining the prudence of buying power from Crossroads. For
example:
Without deciding this issue, we may assume that a particular quantity of power procured by a utility
from a particular source could be deemed unreasonably excessive if lower cost
power is available elsewhere, even though
the higher cost power actually purchased is obtained at a FERC-approved,
and therefore reasonable, price. []
In other words, FERC’s rate-setting for a facility requires
neither the purchase of power, nor approval of that purchase, from that
facility.
Moreover,
in the presence of a FERC-approved rate, the courts have opined that review of
cost prudence remains within the Commission’s jurisdiction.
Regarding the states' traditional power to consider the prudence of a
retailer's purchasing decision in setting retail rates, we find no reason why
utilities must be permitted to recover costs that are imprudently incurred;
those should be borne by the stockholders, not the rate payers. Although
Nantahala underscores that a state cannot independently pass upon the
reasonableness of a wholesale rate on file with FERC, it in no way undermines
the long-standing notion that a state commission may legitimately inquire into
whether the retailer prudently chose to pay the FERC-approved wholesale rate of
one source, as opposed to the lower rate of another source. []
And to recognize the marginal value of purchased power from
Crossroads does not constitute an endorsement of its inflated cost.
Therefore, the
Commission concludes that including the Crossroads transmission costs does not
support safe and adequate service at just and reasonable rates, and the
Commission will deny those costs.
Staff expresses
concerns at the amount of negative margins in GMO’s off-system sales compared
to other regulated electric companies and asks the Commission to urge GMO to do
better. GMO promises to try. No party seeks any relief on this matter any
longer so the Commission will order none, and no further findings
of fact and conclusions of law are required..
The fuel and
purchased power adjustment clause (“FAC”) is, essentially, a device by which
GMO can pass increases or decreases in fuel or purchased power costs to its
customers without a general rate action.
AARP and CCoMO
argue for an end to GMO’s FAC, and all FACs, on policy grounds. But the General
Assembly has determined that the Commission shall have discretion to order an
FAC. AARP and CCoMO have not shown that an FAC for GMO makes safe and adequate
service at just and reasonable rates impossible, so the Commission will not
grant AARP and GMO’s request.
For GMO’s FAC, the
Commission is ordering:
·
No change in the
sharing mechanism.
·
Flow-through of revenues
from excess RECs.
·
Specific exclusion of
Crossroads transmission costs.
·
Continued reporting.
·
New tariff language.
Sharing Percentages. The sharing percentage splits fuel and purchased power
price fluctuations between GMO and its customers.
Findings of Fact
1.
The essence of the current FAC is that fluctuations
in the price of fuel and purchased power, up or down from an established
baseline, pass through to GMO customers at 95%, the remaining 5% is GMO’s to
pay or retain.
2.
The record shows no incident of imprudent GMO
purchasing.
3.
The 95%-5% sharing has been enough incentive
for GMO to maintain prudence in its purchases.
Discussion,
Conclusions of Law, and Ruling
In simplified
terms, an FAC measures fluctuations in the price that GMO pays for fuel and
purchased power and allows GMO to pass such fluctuations through to customers
between general rate actions:
1. . .
. periodic rate adjustments outside of general rate proceedings to reflect
increases and decreases in its prudently incurred fuel and purchased-power
costs, including transportation. []
An FAC must not compromise the opportunity to earn a fair rate of
return; and include periodic true-ups, prudence reviews, refunds, and review
during a general rate action. The statutes also allow incentives to look for lower prices:
The
commission may, in accordance with existing law, include in such rate schedules
features designed to provide the electrical corporation with incentives to
improve the efficiency and cost-effectiveness of its fuel and purchased-power
procurement activities. []
Among those incentives is the sharing percentage.
Essentially,
under the current sharing percentage, of any price decrease, GMO gets to keep
5% and the rest passes on to customers in the form of a rate decrease. And of
any price increase, GMO has to pay 5% and the rest passes on to customers in
the form of a rate increase. Staff proposes an 85%-15% split.
In
support, Staff alleges that the current split does not give GMO enough
incentive to seek the best prices. In support, Staff offers evidence related to
GMO’s satisfaction with the current split, its transactions with KCPL, and its
use of short-term purchase contracts. None of that is persuasive because Staff
has cited no incident of imprudent purchasing. “[M]ere speculations . . . do
not demonstrate that the Commission act[s] unreasonably in permitting this
particular FAC.”
The
Commission concludes that GMO’s current FAC sharing percentages of 95%-5%
better support safe and adequate service at just and reasonable rates than
85%-15%, so the Commission will order GMO’s current percentages for GMO’s FAC.
REC Flow-Through. Staff proposes that, if GMO has more renewable
energy certificates than it needs for
compliance with the renewable energy laws (“excess RECs”), and GMO sells those excess RECs, the proceeds
must pass through the FAC like a fuel price decrease. GMO proposes that the
costs of those RECs pass through the FAC, too, like a fuel price increase. Staff’s
proposal is consistent with law and GMO’s proposal is contrary to law as
follows.
Findings of Fact
1.
When GMO customers pay their bills, GMO uses
that money for a variety of purposes, including purchasing power. GMO has
agreements to purchase power from sellers of renewable energy, including wind
and methane. Purchases or use of power from those sources generate renewable
energy certificates (“RECs”).
2.
RECs are a measure of compliance with laws
promoting the use of renewable energy. When purchasing power, the REC does not
cost extra. If GMO has more RECs than it needs to satisfy the requirements of
law (“excess RECs”), it is prudent practice to sell them.
3.
Because GMO customers paid the money that
generated the REC, if GMO sells the REC, it sells something that the customers
bought.
Discussion,
Conclusions of Law, and Ruling
The FAC
law provides that the Commission may use GMO’s FAC to encourage efficient fuel
and power purchasing:
The commission
may, in accordance with existing law, include in such rate schedules features
designed to provide the electrical corporation with incentives to improve the
efficiency and cost-effectiveness of its fuel and purchased-power procurement
activities. []
Making sure that GMO does not retain the revenue from
excess RECs constitutes an incentive to purchase renewable power efficiently.
GMO
proposes to pass the costs of excess RECs on to customers through the FAC but
Staff cites 4 CSR 240-20.100(6)(A)16, which bars GMO’s proposal:
RES compliance costs shall only be recovered through an RESRAM or as
part of a general rate proceeding and shall not be considered for cost recovery
through an environmental cost recovery mechanism or fuel adjustment clause or interim
energy charge.
That law bars the pass-through of REC costs through GMO’s
FAC. Even without that regulation, GMO’s proposal constitutes a disincentive to
purchase renewable power efficiently.
Staff’s
proposal supports safe and adequate service at just and reasonable rates, so
the Commission will order excess REC revenues to pass through the FAC, but not
the costs of RECs.
Crossroads
Transmission. Several parties ask the Commission to order that GMO’s FAC
tariff sheets state expressly that GMO’s FAC excludes transmission costs related to the Crossroads. Insofar
as the Commission has determined that no transmission costs from Crossroads
will enter GMO’s MPS rates, there is no further dispute, and no further
findings of fact and conclusions of law are required. The Commission will order
GMO’s FAC clarified to state that GMO’s FAC excludes transmission costs related
to Crossroads.
Additional
Reporting. Staff and GMO dispute only
whether the Commission should order the reporting in Appendix D to continue. GMO
objects only to the implication that it has failed to deliver something
demanded of it. That dispute requires no findings of fact and no conclusions of
law because no party seeks relief on it. Therefore, without any finding that
GMO has failed to do anything listed in Appendix D, the Commission will order GMO
to do, or continue to do, the reporting listed in Appendix D.
Changes to FAC Tariff
Sheet Terminology. Staff asks the Commission to order GMO’s FAC tariff
modified to include replacement sheets that, without making substantive
changes, employ standard terminology proposed for all of the Missouri regulated electrical
corporations FACs. No party opposes that request so
the Commission makes no findings of fact and no conclusions of law. Therefore, the
Commission will order that any FAC tariff sheets filed pursuant to this report
and order shall employ the language sought by Staff as set forth in the revised
exemplar FAC
tariff sheets.
V. Compliance Tariffs
For those reasons, the
Commission will reject the tariffs and order the filing of new tariff sheets in
compliance with this report and order (“compliance tariffs”). The parties
request approval of such compliance tariffs effective on January 26, 2013. To
accommodate that request, the Commission will expedite the effective date for
this decision, the
filing date for compliance tariffs, and the filing date for Staff’s recommendation
on the compliance tariffs.
THE COMMISSION ORDERS THAT:
1. The
provisions of the following documents are incorporated into this order as if
fully set forth, either as the Commission’s order or as a consent order, as described
in the body of this report and order:
a. In
File Nos. ER-2012-0174 and ER-2012-0175:
|
Document
|
Filed (2012)
|
|
Partial
Nonunanimous Stipulation and Agreement Respecting Kansas City Water Services
Department and Airport Issues
|
October 19
|
|
Non-Unanimous Stipulation and Agreement
as to Certain Issues
|
October 19
|
|
Non-Unanimous Stipulation and Agreement
Regarding Low-Income Weatherization and Withdrawal of Objection and Request
for Hearing
|
October 26
|
|
Non-Unanimous Stipulation and Agreement Regarding Praxair, Inc., Ag
Processing Inc a Cooperative and the Midwest Energy Users' Association's
Objection and Withdrawal of Objection and Request for Hearing
|
October 29
|
b. In
File No. ER-2012-0174:
|
Second
Non-Unanimous Stipulation and Agreement as to Certain Issues
|
November
8
|
c. In File No. ER-2012-0175:
|
Non-Unanimous Stipulation and Agreement Regarding Class Cost of
Service / Rate Design
|
October
29
|
|
Second
Non-Unanimous Stipulation and Agreement as to Certain Issues
|
November
8
|
2. The
first and second motions to strike, as described in the body of this report and
order, are denied without ruling on the merits. The third motion to strike, as
described in the body of this report and order, is denied.
3. The
Motion to Update Reply Brief and Motion to Provide Supplemental Authorities,
including the additional orders filed on December 26, 2012, are granted.
4. All
other rulings described in the body of this report and order are made in, and
incorporated into, this paragraph as if fully set forth; and, on those grounds,
the tariff sheets listed in Appendix E are rejected.
5. No
later than January 16, 2013:
a. Kansas
City Power and Light Company (“KCPL”) shall file a new tariff consistent with the
rulings described in this report and order (“compliance tariff”) under File No.
ER-2012-0174; and
b. KCPL
Greater Missouri Operations Company (“GMO”) shall file a compliance tariff in File
No. ER-2012-0175.
6. No
later than January 24, 2013, the Commission’s staff shall file a recommendation
on the compliance tariffs.
7. No
later than February 5, 2013, the information required under Section 393.275.1,
RSMo 2000, and 4 CSR 240-10.060 shall be filed:
a. By
KCPL in File No. ER-2012-0174; and
b. By
GMO in File No. ER-2012-0175
8. This
order shall become effective on January 9, 2013.
BY THE COMMISSION
( S E A L )
Shelley Brueggemann
Acting Secretary
Gunn, Chm., Jarrett, Kenney, and
Stoll, CC., concur;
and certify compliance with the
provisions of Section 536.080, RSMo.
Dated at Jefferson City, Missouri,
on this 9th day of January, 2013
Appendix A: Appearances
|
Party
|
Counsel
|
Counsel’s Address
|
|
i. Applicants
|
|
Kansas City Power & Light Company;
and
KCP&L
Greater Missouri Operations Company
|
James M. Fischer
|
101 Madison
Street
Jefferson City,
Missouri 65101
|
|
Lisa A. Gilbreath
Karl Zobrist
|
4520 Main, Suite 1100
Kansas City, MO 64111
|
|
Heather A. Humphrey Roger W. Steiner
|
1200 Main, PO Box 418679
Kansas City, MO 64141-9679
|
|
Charles W. Hatfield
|
230 W. McCarty Street
Jefferson City,
MO 65101-1553
|
|
ii. Parties under 4 CSR 240-2.010(10)
|
|
Staff of the Commission
|
Kevin Thompson
Steven Dottheim
Nathan Williams
Jeff Keevil
Sarah Kliethermes
Annette Slack
Tanya Alm
John Borgmeyer
|
P.O. Box 360
200 Madison Street, Suite 800
Jefferson City, MO 65102
|
|
Office of the Public Counsel
|
Lewis R. Mills, Jr.
Christina Baker
|
200 Madison Street, Suite 650
P.O. Box 2230
Jefferson City, MO 65102
|
|
iii.
Intervenors
|
|
AARP;
and
Consumers
Council of Missouri
|
John B. Coffman
|
871 Tuxedo Blvd.
St. Louis, MO 63119-2044
|
|
AG Processing,
Inc.
a Cooperative
and
Midwest Energy
Users' Group
|
Stuart Conrad
|
3100 Broadway
Suite 1209
Kansas City, MO 64111
|
|
City of Kansas
City, Missouri
|
Mark W. Comley
|
601 MonRoE Street., Suite 301
Jefferson City, MO
65102-0537
|
|
Dogwood Energy,
LLC
|
Carl J. Lumley
|
130 S. Bemiston, Ste 200
St. Louis, MO 63105
|
|
Federal
Executive Agencies
|
Steven E. Jones
|
1104 SE Talonia Drive
Lee’s Summit, MO 64081
|
|
Midwest Energy
Consumers Group
|
David Woodsmall
|
807 Winston Court
Jefferson City, MO 65101
|
|
Midwest Energy Users’
Association-Kansas City
|
Reed J. Bartels
|
3100 Broadway, Suite 1209
|
|
Jeremiah D. Finnegan
|
1200 Penntower Office Center
3100 Broadway
Kansas City, MO 64111
|
|
Missouri
Department of Natural Resources
|
Jessica L. Blome
Mary Ann Young
|
221 W. High Street
P.O. Box 899
Jefferson City, MO 65102
|
|
The Empire
District Electric Company
|
Diana C. Carter
|
312 East Capitol
P.O. Box 456
Jefferson City, MO 65102
|
|
Southern Union
Company
|
Dean L. Cooper
|
312 East Capitol
P.O. Box 456
Jefferson City, MO 65102
|
|
Todd J. Jacobs
|
3420 Broadway
Kansas City, MO 64111
|
|
Missouri
Industrial Energy Consumers
|
Diana M. Vuylsteke
John R. Kindschuh
|
211 N. Broadway, Suite 3600
St. Louis, MO 63102
|
|
Natural Resources Defense Council;
and
Sierra Club
|
Henry B. Robertson
|
705 Olive Street, Suite 614
St. Louis, MO 63101
|
|
Thomas Cmar
|
5042 N. Leavitt St., Ste 1
Chicago, IL 60625
|
|
Shannon Fisk
|
1617 John F. Kennedy Blvd.
Suite 1675
Philadelphia, PA 19103
|
|
Earth Island Institute d/b/a Renew Missouri
|
Shannon Fisk
|
1617 John F. Kennedy Blvd
Suite 1675, Philadelphia, PA 19103
|
|
Union Electric
Company
|
James B. Lowery
|
111 South Ninth St. Suite 200,
P.O. Box 918
Columbia, MO 65205-0918
|
|
Thomas M. Byrne
|
1901 Chouteau Avenue
P.O. Box 66149 (MC 1310)
St. Louis, MO 63166-6149
|
|
United States
Air Force-Whiteman AFB and other affected federal agencies
|
Steven E. Jones
|
1104 SE Talonia Drive
Lee’s Summit, MO 64081
|
|
Capt. Samuel T. Miller
|
139 Barnes Drive, Suite 1
Tyndall Air Force Base,
FL 32403
|
|
United States
Department of Energy and other affected federal
agencies
|
Therese LeBlanc
|
2000 E. 95th St.
P.O. Box 419159
Kansas City, MO 64141
|
|
Arthur Perry Bruder
|
1000 Independence Ave. SW
Washington, DC 20585
|
|
Missouri Joint Municipal
Electrical Utility Commission
|
Douglas L. Healy
|
939 Boonville, Suite A
Springfield, Missouri 65802
|
Senior Regulatory
Law Judge: Daniel Jordan.
i. Initial Briefs
|
Party
|
ER-2012-0174 and ER2012-0175
|
|
Kansas City Power &
Light Company; and
KCP&L Greater
Missouri Operations Company
|
Proposed Findings of Fact
and Conclusions of Law of Kansas City Power & Light Company and KCP&L
Greater Missouri Operations Company; and
Initial Post-Hearing
Brief of Kansas City Power & Light Company and KCP&L Greater Missouri
Operations Company
|
|
Staff
|
Staff’s Initial Brief
|
|
Office of the Public
Counsel
|
Initial Brief of the
Office of the Public Counsel
|
|
AARP
|
Initial Brief of AARP
|
|
Consumers Council of
Missouri
|
Initial Brief of
Consumers Council of Missouri
|
|
Federal Executive
Agencies
|
The Federal Executive
Agencies’ Post-Hearing Brief on Rate of Return and Capital Structure
|
|
Missouri Industrial
Energy Consumers
|
Initial Brief of Missouri
Industrial Energy Consumers
|
|
|
ER-2012-0174
|
ER-2012-0175
|
|
Midwest Energy Consumers’
Group
|
Initial Posthearing Brief
of Midwest Energy Consumers’ Group (KCPL Issues)
|
Initial Posthearing Brief
of Midwest Energy Consumers’ Group (GMO Issues)
|
|
Southern Union Company
|
Initial Brief of Southern
Union Company d/b/a Missouri Gas Energy
|
Initial Brief of Southern
Union Company d/b/a Missouri Gas Energy
|
|
|
ER-2012-0174
|
|
Sierra Club
|
Brief of Sierra Club
|
|
Midwest Energy Users’
Association-Kansas City
|
Post-Hearing Brief
Midwest Energy Users’ Association
|
|
Praxair, Inc.
|
Praxair, Inc. Statement
in Lieu of Initial Brief
|
|
|
ER-2012-0175
|
|
Midwest Energy Users’
Group and AG Processing, Inc. a Co-Operative
|
Initial Brief on Limited
Issues by Midwest Energy Users’ Group and AG Processing, Inc. a Co-Operative
|
|
Dogwood Energy, LLC
|
Proposed Findings of Fact
and Conclusions of Law; and
Brief
|
|
Federal Executive
Agencies
|
The Federal Executive
Agencies’ Post-Hearing Brief on Transmission Tracker
|
ii. Reply Briefs
|
Party
|
ER-2012-0174 and ER2012-0175
|
|
Kansas City Power &
Light Company; and
KCP&L Greater
Missouri Operations Company
|
Reply Post-Hearing Brief
of Kansas City Power & Light Company and KCP&L Greater Missouri
Operations Company
|
|
Staff
|
Staff’s Reply Brief
|
|
Office of the Public
Counsel
|
Post-Hearing Reply Brief
of the Office of the Public Counsel
|
|
Federal Executive
Agencies
|
The Federal Executive
Agencies’ Reply Brief on Rate of Return and Capital Structure
|
|
Missouri Industrial
Energy Consumers
|
Reply Brief of the Missouri
Industrial Energy Consumers
|
|
Midwest Energy Consumers’
Group
|
Reply Posthearing Brief
of Midwest Energy Consumers’ Group; and Proposed Findings of Fact and
Conclusions of Law
|
|
Southern Union Company
|
Reply Brief of Southern
Union Company d/b/a Missouri Gas Energy
|
|
|
ER-2012-0174
|
|
Sierra Club
|
Reply Brief of Sierra
Club
|
|
Midwest Energy Users’
Association-Kansas City
|
Post-Hearing Reply Brief
Midwest Energy Users’ Association-Kansas City
|
|
|
ER-2012-0175
|
|
Dogwood Energy, LLC
|
Dogwood Energy, LLC’s
Reply Brief
|
· As part of the information GMO submits when it files a
tariff modification to change its FAC rate,
GMO includes GMO’s calculation
of the interest included in the proposed rate;
· GMO maintains at GMO’s corporate headquarters or at some
other mutually agreed upon place within
a mutually agreed upon time for review, a copy of each and every
nuclear fuel, coal and transportation contract GMO has that is, or was, in
effect for the previous four years;
· Within 30 days of the effective date of each and every
nuclear fuel, coal and transportation
contract GMO enters into, GMO provides both notice to the Staff
of the contract and opportunity to review the contract at GMO’s corporate
headquarters or at some other mutually agreed upon place;
· GMO maintains at GMO’s
corporate headquarters or provides at some other mutually
agreed upon place within a mutually agreed upon time, a copy for review
of each and every natural gas contract GMO has that is in effect;
· Within 30 days of the effective date of each and every
natural gas contract GMO enters into, GMO provides
both notice to the Staff of the contract and
opportunity for review of the contract at GMO’s corporate headquarters
or at some other mutually agreed upon place;
· GMO provides a copy of each and every GMO hedging
policy that is in effect at the time the tariff changes ordered by the
Commission in this rate case go into effect for Staff to retain;
· Within
30 days of any change in a GMO hedging policy, GMO provides a copy of the
changed hedging policy for Staff to retain;
· GMO
provides a copy of GMO’s internal policy for participating in the SPP, including any GMO sales or purchases from that
market that are in effect at the
time the tariff changes ordered by the Commission in this rate case go into
effect for Staff to retain; and
· If GMO revises any internal policy for participating in
the SPP, within 30 days of that revision, GMO
provides a copy of the revised policy with the revisions
identified for Staff to retain.
The tariff sheets rejected are:
i. In File No. ER-2012-0174, the tariff assigned
tracking number YE-2012-0404:
Kansas City Power & Light Company
PSC Mo. No. 7
11th Revised Sheet No. TOC-1, canceling 10th
Revised Sheet No. TOC-1
7th Revised Sheet No. 5A, canceling 6th
Revised Sheet No. 5A
7th Revised Sheet No. 5B, canceling 6th
Revised Sheet No. 5B
2nd Revised Sheet No. 5C, canceling 1st
Revised Sheet No. 5C
2nd Revised Sheet No. 6, canceling 1st
Revised Sheet No. 6
7th Revised Sheet No. 8, canceling 6th
Revised Sheet No. 8
6th Revised Sheet No. 8A, canceling 5th
Revised Sheet No. 8A
7th Revised Sheet No. 9A, canceling 6th
Revised Sheet No. 9A
7th Revised Sheet No. 9B, canceling 6th
Revised Sheet No. 9B
2nd Revised Sheet No. 9E, canceling 1st
Revised Sheet No. 9E
7th Revised Sheet No. 10A, canceling 6th
Revised Sheet No. 10A
7th Revised Sheet No. 10B, canceling 6th
Revised Sheet No. 10B
7th Revised Sheet No. 10C, canceling 6th
Revised Sheet No. 10C
2nd Revised Sheet No. 10E, canceling 1st
Revised Sheet No. 10E
7th Revised Sheet No. 11A, canceling 6th
Revised Sheet No. 11A
7th Revised Sheet No. 11B, canceling 6th
Revised Sheet No. 11B
7th Revised Sheet No. 11C, canceling 6th
Revised Sheet No. 11C
2nd Revised Sheet No. 11E, canceling 1st
Revised Sheet No. 11E
7th Revised Sheet No. 14A, canceling 6th
Revised Sheet No. 14A
7th Revised Sheet No. 14B, canceling 6th
Revised Sheet No. 14B
7th Revised Sheet No. 14C, canceling 6th
Revised Sheet No. 14C
2nd Revised Sheet No. 14E, canceling 1st
Revised Sheet No. 14E
7th Revised Sheet No. 17A, canceling 6th
Revised Sheet No. 17A
3rd Revised Sheet No. 17D, canceling 2nd
Revised Sheet No. 17D
7th Revised Sheet No. 18A, canceling 6th
Revised Sheet No. 18A
7th Revised Sheet No. 18B, canceling 6th
Revised Sheet No. 18B
7th Revised Sheet No. 18C, canceling 6th
Revised Sheet No. 18C
3rd Revised Sheet No. 18E, canceling 2nd
Revised Sheet No. 18E
7th Revised Sheet No. 19A, canceling 6th
Revised Sheet No. 19A
7th Revised Sheet No. 19B, canceling 6th
Revised Sheet No. 19B
7th Revised Sheet No. 19C, canceling 6th
Revised Sheet No. 19C
3rd Revised Sheet No. 19D, canceling 2nd
Revised Sheet No. 19D
7th Revised Sheet No. 20C, canceling 6th
Revised Sheet No. 20C
1st Revised Sheet No. 20E, canceling
Original Sheet No. 20E
2nd Revised Sheet No. 24, canceling 1st
Revised Sheet No. 24
12th Revised Sheet No. 24A, canceling 11th
Revised Sheet No. 24A
3rd Revised Sheet No. 25D, canceling 2nd
Revised Sheet No. 25D
3rd Revised Sheet No. 26D, canceling 2nd
Revised Sheet No. 26D
6th Revised Sheet No. 28B, canceling 5th
Revised Sheet No. 28B
2nd Revised Sheet No. 28D, canceling 1st
Revised Sheet No. 28D
2nd Revised Sheet No. 29D, canceling 1st
Revised Sheet No. 29D
7th Revised Sheet No. 30, canceling 6th Revised
Sheet No. 30
1st Revised Sheet No. 30A, canceling
Original Sheet No. 30A
7th Revised Sheet No. 33, canceling 6th
Revised Sheet No. 33
3rd Revised Sheet No. 33B, canceling 2nd
Revised Sheet No. 33B
7th Revised Sheet No. 35, canceling 6th
Revised Sheet No. 35
7th Revised Sheet No. 35A, canceling 6th
Revised Sheet No. 35A
7th Revised Sheet No. 35B, canceling 6th
Revised Sheet No. 35B
7th Revised Sheet No. 35C, canceling 6th
Revised Sheet No. 35C
7th Revised Sheet No. 36, canceling 6th
Revised Sheet No. 36
7th Revised Sheet No. 36A, canceling 6th
Revised Sheet No. 36A
7th Revised Sheet No. 36B, canceling 6th
Revised Sheet No. 36B
7th Revised Sheet No. 37, canceling 6th
Revised Sheet No. 37
7th Revised Sheet No. 37A, canceling 6th
Revised Sheet No. 37A
7th Revised Sheet No. 37B, canceling 6th
Revised Sheet No. 37B
7th Revised Sheet No. 37C, canceling 6th
Revised Sheet No. 37C
7th Revised Sheet No. 37D, canceling 6th
Revised Sheet No. 37D
7th Revised Sheet No. 37E, canceling 6th
Revised Sheet No. 37E
7th Revised Sheet No. 37F, canceling 6th
Revised Sheet No. 37F
7th Revised Sheet No. 37G, canceling 6th
Revised Sheet No. 37G
7th Revised Sheet No. 45, canceling 6th
Revised Sheet No. 45
7th Revised Sheet No. 45A, canceling 6th
Revised Sheet No. 45A
1st Revised Sheet No. 43Z, canceling
Original Sheet No. 43Z
1st Revised Sheet No. 43Z.1, canceling
Original Sheet No. 43Z.1
1st Revised Sheet No. 43Z.2, canceling
Original Sheet No. 43Z.2
1st Revised Sheet No. 43Z.3, canceling
Original Sheet No. 43Z.3
1st Revised Sheet No. 43AQ, canceling
Original Sheet No. 43AQ
1st Revised Sheet
No. 50, canceling Original Sheet No. 50.
ii. In File No. ER-2012-0175, the tariff assigned
tracking number YE-2012-0405.
KCP&L Greater Missouri Operations
Company
PSC Mo. No. 1, Electric Rates
5th Revised Sheet No. 1, canceling 4th Revised Sheet No.1
6th Revised Sheet No. 18, canceling 5th Revised Sheet No.
18
6th Revised Sheet No. 19, canceling 5th Revised Sheet No.
19
6th Revised Sheet No. 21, canceling 5th Revised Sheet No.
21
6th Revised Sheet No. 22, canceling 5th Revised Sheet No.
22
6th Revised Sheet No. 23, canceling 5th Revised Sheet No.
23
6th Revised Sheet No. 24, canceling 5th Revised Sheet No.
24
6th Revised Sheet No. 25, canceling 5th Revised Sheet No.
25
6th Revised Sheet No. 28, canceling 5th Revised Sheet No.
28
6th Revised Sheet No. 29, canceling 5th Revised Sheet No.
29
6th Revised Sheet No. 31, canceling 5th Revised Sheet No.
31
6th Revised Sheet No. 34, canceling 5th Revised Sheet No.
34
6th Revised Sheet No. 35, canceling 5th Revised Sheet No.
35
6th Revised Sheet No. 41, canceling 5th Revised Sheet No.
41
6th Revised Sheet No. 42, canceling 5th Revised Sheet No.
42
6th Revised Sheet No. 43, canceling 5th Revised Sheet No.
43
6th Revised Sheet No. 44, canceling 5th Revised Sheet No.
44
6th Revised Sheet No. 47, canceling 5th Revised Sheet No.
47
6th Revised Sheet No. 48, canceling 5th Revised Sheet No.
48
6th Revised Sheet No. 50, canceling 5th Revised Sheet No.
50
5th Revised Sheet No. 51, canceling 4th Revised Sheet No.
51
5th Revised Sheet No. 52, canceling 4th Revised Sheet No.
52
5th Revised Sheet No. 53, canceling 4th Revised Sheet No.
53
5th Revised Sheet No. 54, canceling 4th Revised Sheet No.
54
5th Revised Sheet No. 56, canceling 4th Revised Sheet No.
56
5th Revised Sheet No. 57, canceling 4th Revised Sheet No.
57
6th Revised Sheet No. 60, canceling 5th Revised Sheet No.
60
6th Revised Sheet No. 61, canceling 5th Revised Sheet No.
61
5th Revised Sheet No. 66, canceling 4th Revised Sheet No.
66
5th Revised Sheet No. 67, canceling 4th Revised Sheet No.
67
5th Revised Sheet No. 68, canceling 4th Revised Sheet No.
68
5th Revised Sheet No. 70, canceling 4th Revised Sheet No.
70
5th Revised Sheet No. 71, canceling 4th Revised Sheet No.
71
5th Revised Sheet No. 74, canceling 4th Revised Sheet No.
74
5th Revised Sheet No. 76, canceling 4th Revised Sheet No.
76
5th Revised Sheet No. 79, canceling 4th Revised Sheet No.
79
5th Revised Sheet No. 80, canceling 4th Revised Sheet No.
80
6th Revised Sheet No. 88, canceling 5th Revised Sheet No.
88
6th Revised Sheet No. 89, canceling 5th Revised Sheet No.
89
5th Revised Sheet No. 90, canceling 4th Revised Sheet No.
90
6th Revised Sheet No. 91, canceling 5th Revised Sheet No.
91
6th Revised Sheet No. 92, canceling 5th Revised Sheet No.
92
4th Revised Sheet No. 93, canceling 3rd Revised Sheet No.
93
6th Revised Sheet No. 95, canceling 5th Revised Sheet No.
95
5th Revised Sheet No. 103, canceling 4th Revised Sheet No.
103
5th Revised Sheet No. 104, canceling 4th Revised Sheet No.
104
1st Revised Sheet No. 127.6, canceling Original Sheet
No. 127.6
1st Revised Sheet No. 127.7, canceling Original Sheet
No. 127.7
1st Revised Sheet No. 127.8, canceling Original Sheet
No. 127.8
1st Revised Sheet No. 127.9, canceling Original Sheet
No. 127.9
Original Sheet No. 127.11
Original Sheet No. 127.12
Original Sheet No. 127.13
Original Sheet No. 127.14
Original Sheet No. 127.15
1st Revised Sheet No. 143, canceling Original Sheet No.
143
KCP&L Greater Missouri Operations
Company
PSC Mo. No. 1, Electric Rules and
Regulations
1st Revised Sheet No. 62.15, canceling Original Sheet
No. 62.15
1st Revised Sheet No. 62.16, canceling Original Sheet
No. 62.16
1st Revised Sheet No. 62.17, canceling Original Sheet
No. 62.17
1st Revised
Sheet No. 62.18, canceling Original Sheet No. 62.18.
