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This is the second of several annual rate requests per the regulatory agreement. It allows a rate request every Feb, and if approved, will take effect the following Jan. I think they can make the rate requests each year through 2010 or 2011(?) to pay for their comprehensive energy plan. This increase is also for increased fuel costs and operating costs
Posted on Feb. 5, 2007
By STEVE EVERLY
The Kansas City Star
KCP&L Files for 8% Rate Increase in Missouri
Kansas City Power & Light is seeking an 8 percent rate increase in Missouri to cover higher fuel and overhead expenses, as well as some of the cost of its energy plan.
The request, filed Thursday with the Missouri Public Service Commission, comes a year after another rate request by the utility. State regulators approved a 10 percent increase in December, which went into effect earlier this month.
The current request, if approved, would raise $45 million in annual revenues. It also would raise the monthly bill of an average residential customer by roughly $6, according to KCP&L. If approved, it would probably go into effect next January.
A separate request to raise rates in Kansas is expected to be filed with state regulators in a few weeks. The Kansas Corporation Commission in December approved a 9 percent increase for KCP&L customers in the state.
The largest part of the Missouri request - 40 percent - would go toward paying the additional cost of fuel including natural gas used to generate electricity. Transportation costs for coal, KCP&L's primary fuel, have also risen. Another 24 percent of the request is for operating costs including the cost of additional employees hired by the utility.
The rest of the request, 36 percent, would help pay the cost of KCP&L's comprehensive energy plan, which includes a wind farm, energy conservation efforts, environmental retrofits and an 850-megawatt coal-fired power plant near Weston.
The cost of the energy plan has increased in recent months. William Downey, president of KCP&L, said that by 2010, when the power plant will be completed, rates to pay for the energy plan should have increased by 20 to 25 percent. He said the company expected to stay in that range.
The 20-25 percent figure, however, doesn't include rate increases for other expenses such as higher fuel costs.
Construction of the coal-fired plant had been estimated at $733 million for the utility. KCP&L will own 55 percent of the plant, with Aquila Inc., Empire District Electric Co. and municipal utilities in Missouri and Kansas owning the rest. The new estimate of KCP&L's part of the plant costs, which the company previously announced, is $837 million to $914 million.
KCP&L estimates its cost to retrofit its LaCygne power plant have climbed 56 percent and, when a contingency cushion is included, are up 63 percent. The estimate, which had been $272 million, is now $423 million to $443 million.
The rate request filed Thursday is part of an agreement made with Missouri and Kansas regulators that allows periodic rate requests. The agreement also calls for rates high enough that the utility can keep its debt rating at investment grade.
To reach Steve Everly, all (816) 234-4455 or send e-mail to severly@kcstar.com
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