JEFFERSON CITY, Mo. – The Missouri Public Service Commission has decided Wednesday to grant Kansas City Power & Light (KCPL) an electric rate increase to the tune of $89.7 million after the utility company bore increased costs for its services. The PSC also authorized a return on equity of 9.5 percent, lower than their current return on equity of 9.7 percent.
The Commission voted 4-0 to approve the measure, with the newest addition to the PSC, Maida Coleman, abstaining.
KCPL filed their rate request in Oct. 2014, initially asking for $120.9 million in operating revenues, a return on equity of 10.3 percent, and an increase in fixed charges of on customers’ monthly bills from $9.00 to $25.00. The utility company wanted the increase to pay for upgrades to some its facilities, including an environmental retrofit at its LaCygne power plant and some improvements at the Wolf Creek Nuclear Plant, as well as increases in transmission expenses, infrastructure investments and property taxes.
Instead of $25.00 per month, the deal approved by the Commission will only increase the fixed charge for residential customers from $9.00 to $11.88 per month. The impact of the rate increase will bump that up to just under $12.00.
The Commission believes ratepayers should only reimburse KCPL for a portion of its rate case expense. The rest of the burden will fall on KCPL shareholders because the PSC believes they should to ensure “just and reasonable” rates.
“One method to encourage KCPL to limit its rate case expenditures would be to link KCPL’s percentage recovery of rate case expense to the percentage of its rate increase request the Commission finds just and reasonable,” the PSC’s order reads. “The Commission determines that this approach would directly link KCPL’s recovery of rate case expense to both the reasonableness of its issue positions and the dollar value sought from customers in this rate case.”
The Commission also ruled the KCPL will continue its low-income weatherization program and will increase funding and participation in its Economic Relief Pilot Program (ERPP) for low-income customers. The PSC opened a separate case in regards to rates on KCPL’s Clean Charge Network, a network of over 1,000 electric vehicle charging stations.
KCPL serves approximately 270,000 electric customers in 14 Missouri Counties.
