Company News »

KCP&L Files Rate Increase Request with Missouri Public Service Commission

Business Wire
Share on StockTwits
Published on

Kansas City Power & Light (KCP&L), a subsidiary of Great Plains Energy Incorporated (NYSE:GXP) , today filed a request with the Missouri Public Service Commission to increase base rates for electric service to approximately 270,000 of its 565,000 Missouri customers in the KCP&L Missouri service area. The request is for a 15.8 percent rate increase, which would result in an average residential customer paying less than an additional $14 per month, if approved. The rate request process takes approximately 11 months in Missouri, and new rates are expected to take effect on or about September 30, 2015.

One of the primary reasons for the proposed increase is the utility’s need to recover costs for federal and state-mandated environmental upgrades at its La Cygne power plant. These investments will allow La Cygne, one of the company’s largest and lowest cost coal-fired power plants, to continue operating after June 2015, when major environmental regulations go into effect. Once completed, approximately 72 percent of KCP&L’s coal fleet will have emission-reducing scrubbers installed and all of its large base-load coal units are expected to be in compliance with existing environmental rules and regulations.

Other reasons for the increase request include the numerous infrastructure and system improvements KCP&L has made to maintain the overall reliability of its electrical system and modernize the grid.

“Through aggressive and ongoing cost management, we continue to provide electricity at rates that are comparable in our region,” said Terry Bassham, President and CEO of Great Plains Energy and KCP&L. “However, government mandates have resulted in increased costs as we comply with environmental rules and provide cleaner power to our customers. This request reflects the significant investments KCP&L has made to continue to provide cleaner, reliable electricity to our customers.”

KCP&L is also announcing that it plans to file a rate increase request for its Kansas service area in January. The increase percentage is not yet known.

The Company is required to file a rate increase request for the remaining 295,000 Missouri customers in its KCP&L Greater Missouri Operations service area by early 2016. To see a map of KCP&L’s different service areas, visit www.kcpl.com/servicearea.

Environmental Upgrades at La Cygne Power Plant

Environmental Protection Agency (EPA) regulations require KCP&L to make upgrades to its La Cygne power plant. La Cygne is the second largest power plant in KCP&L’s system, which means it produces a significant amount of the electricity this region relies on to supply its homes and businesses. It is also one of the lowest cost coal-fired power plants in KCP&L’s fleet and helps keep rates affordable for customers.

The increase request will help cover the costs of the environmental upgrades that began in September 2011. The improvements include the installation of baghouses and wet scrubbers, a new chimney to serve both units, and a selective catalytic reduction system, all of which help reduce emissions and further KCP&L’s commitment to providing cleaner energy to its customers. Construction is expected to be completed by June 2015, and is currently on schedule and at or below budget.

Infrastructure and Reliability Investments

KCP&L is also seeking to recover costs associated with the significant needed reliability investments it has made in recent years. The utility has replaced aging infrastructure and made system improvements, such as modernizing substations, which allow KCP&L to respond even quicker to power outages. These investments help ensure the company is able to continue providing customers the most reliable electrical service in the region for decades to come.

Additional infrastructure improvements include replacing electric meters in the KCP&L Missouri service area, which will help identify potential outages quicker. KCP&L has also made upgrades to other power plants, like the Wolf Creek nuclear power plant. It also plans to expand its tree trimming program, which helps prevent outages.

Another reliability investment that is a part of this rate increase request is the need for additional transmission lines. Transmission lines, the highway for the electrical system, deliver renewable energy from remote areas to cities. More transmission lines create greater opportunity for lower cost power to reach customers, allow for additional mandated renewable energy to be transported and reduce congestion on the grid.

Customer Programs

In an effort to offset an approved increase and help customers manage their energy costs, KCP&L is also requesting to expand one of its payment assistance programs. KCP&L’s Economic Relief Pilot Program (ERPP) offers up to a $50 monthly bill credit to income-eligible customers. KCP&L is requesting to double the amount of funding available for this program and is seeking to expand the monthly bill credit amount to up to $65 for qualifying customers.

ERPP helps relieve some of the financial hardships experienced by lower to moderate-income, working-class customers. The utility has made a concentrated effort to make programs like this available to customers who don’t typically qualify for government-assistance programs. A full list of programs KCP&L offers to customers who need help paying their monthly electricity bills can be found at www.kcpl.com/assistance.

“As part of our request, KCP&L is asking to expand our payment assistance programs to reach even more customers,” said Bassham. “It is our hope that expanding these programs will help lower-income and older customers on fixed incomes offset the impact of the increase in rates. We encourage all customers to call us before they fall behind so that we can help find the right solution for their particular situation.”

KCP&L also offers energy-efficiency programs as a way customers can save energy and money. Through these programs, Missouri customers can earn rebates for energy-efficient lighting, recycling old appliances and replacing inefficient cooling systems, among other things. All of KCP&L’s energy-saving programs can be seen at www.kcpl.com/savemore.

For more information on KCP&L’s Missouri rate request, visit www.kcpl.com/MissouriRates.

About Great Plains Energy:

Headquartered in Kansas City, Mo., Great Plains Energy Incorporated (NYSE:GXP) is the holding company of Kansas City Power & Light Company and KCP&L Greater Missouri Operations Company, two of the leading regulated providers of electricity in the Midwest. Kansas City Power & Light Company and KCP&L Greater Missouri Operations Company use KCP&L as a brand name. More information about the companies is available on the Internet at: www.greatplainsenergy.com or www.kcpl.com.

Forward-Looking Statements:

Statements made in this release that are not based on historical facts are forward-looking, may involve risks and uncertainties, and are intended to be as of the date when made. Forward-looking statements include, but are not limited to, the outcome of regulatory proceedings, cost estimates of capital projects and other matters affecting future operations. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Great Plains Energy and KCP&L are providing a number of important factors that could cause actual results to differ materially from the provided forward-looking information. These important factors include: future economic conditions in regional, national and international markets and their effects on sales, prices and costs; prices and availability of electricity in regional and national wholesale markets; market perception of the energy industry, Great Plains Energy and KCP&L changes in business strategy, operations or development plans; the outcome of contract negotiations for goods and services; effects of current or proposed state and federal legislative and regulatory actions or developments, including, but not limited to, deregulation, re-regulation and restructuring of the electric utility industry; decisions of regulators regarding rates the Companies can charge for electricity; adverse changes in applicable laws, regulations, rules, principles or practices governing tax, accounting and environmental matters including, but not limited to, air and water quality; financial market conditions and performance including, but not limited to, changes in interest rates and credit spreads and in availability and cost of capital and the effects on nuclear decommissioning trust and pension plan assets and costs; impairments of long-lived assets or goodwill; credit ratings; inflation rates; effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments; impact of terrorist acts, including but not limited to cyber terrorism; ability to carry out marketing and sales plans; weather conditions including, but not limited to, weather-related damage and their effects on sales, prices and costs; cost, availability, quality and deliverability of fuel; the inherent uncertainties in estimating the effects of weather, economic conditions and other factors on customer consumption and financial results; ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages; delays in the anticipated in-service dates and cost increases of generation, transmission, distribution or other projects; Great Plains Energy’s ability to successfully manage transmission joint venture; the inherent risks associated with the ownership and operation of a nuclear facility including, but not limited to, environmental, health, safety, regulatory and financial risks; workforce risks, including, but not limited to, increased costs of retirement, health care and other benefits; and other risks and uncertainties.

This list of factors is not all-inclusive because it is not possible to predict all factors. Other risk factors are detailed from time to time in Great Plains Energy’s and KCP&L’s quarterly reports on Form 10-Q and annual report on Form 10-K filed with the Securities and Exchange Commission. Each forward-looking statement speaks only as of the date of the particular statement. Great Plains Energy and KCP&L undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Share on StockTwits