The Missouri Public Service Commission on Wednesday unanimously approved a 12.3 percent rate increase for Kansas City Power & Light customers in the St. Joseph area.

Kevin Kelly, a spokesman for the PSC, said the percentage increase affects all of the utility’s customers — residential and commercial combined — in the former St. Joseph Light & Power service territory.

Based on a residential customer using 1,150 kilowatts an hour in the summer and 760 kilowatts per hour in the winter, the increase will amount to an additional $12.91 per monthly bills, Mr. Kelly said. The commission granted $21 million of the $25.2 million sought by the original filing.

The new rates are expected to become effective later this month, based on negotiations between KCP&L and the state.

Commission Chairman Kevin Gunn said the decision marks a transition toward an electric system founded on energy efficiency and resources to help empower consumers in controlling their individual usage and costs.

“The biggest piece of this is that we had all parties in the case agree to implementing energy efficiency programs,” he said. “That’s probably the biggest chunk of the increase.”

In November, the commission approved KCP&L’s involvement in the Missouri Energy Efficiency Investment Act, which promotes cost-savings programs oriented to consumers. Sen. Brad Lager, R-Savannah, sponsored the measure.

Utility spokeswoman Katie McDonald said a series of energy efficiency measures are currently under development and will be available to customers later in the year. As part of the case, the commission approved an agreement to continue an economic relief pilot program aimed at helping low-income customers with their bills.

The commission chose to cap the company’s return-on-equity rate for its investments at 9.7 percent, rather than the 10.4 percent sought by the request as a way of attracting investors. Mr. Gunn said the national average for utilities’ return on equity is about 10 percent.

“We felt like a reduction in that was appropriate,” Mr. Gunn said, adding that the ratio represented a “huge dollar issue.”

A request by KCP&L to increase fixed charges for customers was denied.

“We don’t want to dis-incentivize people” from pursuing energy efficiency, Mr. Gunn said.

Ms. McDonald said KCP&L does not agree with all portions of the commission’s decision, including the rate of return on equity.

“We’re currently reviewing the order to understand its implications,” she said. “There are obviously costs of serving our customers that are not in the rate.”

She added that the utility is pleased the commission recognizes the importance of investing in a reliable electric system and paying for environmental upgrades.

There are no current plans by KCP&L to file a new rate case later this year, according to Ms. McDonald. She said the company’s rate requests have been smaller than would have been the case had the merger with Aquila not occurred in 2008.

In late February, KCP&L filed a $25.2 million case with the commission that sought to increase electric rates by 14.6 percent. The commission had up to 11 months from the filing to reach a decision.

A 2½-hour local public hearing was held Sept. 12 at City Hall, where most residents spoke in opposition to the request. Affordability was most often mentioned as the overriding issue among those who haven’t seen pay raises at their jobs or who are on fixed incomes.

Officials with the utility cited costs that have outpaced its ability to maintain current rates as justification for the case, along with a need to replace aging infrastructure.

In May 2011, the commission approved phased-in electric rate increases of slightly more than 21 percent for KCP&L’s St. Joseph service territory.

Formal hearings in the case were held in the fall in Jefferson City. Missouri Gas Energy and Ag Processing participated in the case as intervenors. Both firms have operations in St. Joseph.

There are approximately 66,000 customers in the former Light & Power service territory now operated by KCP&L.

Ray Scherer can be reached

at ray.scherer@newspressnow.com. Follow him on Twitter: @SJNPScherer.

(4) comments

jdw64485
jdw64485

Once again the Missouri Public service commission was brought out and screwed the people of Misssouri. These fools needs to go. When will the Govenor open is eyes to this and do something. Wow, I got a 7.1 % increase and already i lost it.

10former
10former

Keep
Cheatin the
Public
&
Lie about it.

64503
64503

Wow what world does the people on the PCS commision live in? This just about 40% increases they have approved for KCP&L over the last few years altogether. I thought they were suppose to protect the people!!. These people need to go and need ot be replaced. How do they think people like the elderly on fixed icomes are gonna handle another 12 percent increase, how pwoplw who already are struggling to make ends meet are gonna handle 12 percent increase, OH I know the great economy and job market that we continue to blow smoke about and how well the job market is locally. Yea if you work for 7.35 hour and nhave no medical benefits and you work 2 of the 40 hour a week jobs at 7.35 a hour and then well lets see this is not even above poverty level. I am glad the PCS has the customers best interest at mind.

GoHawkeyes
GoHawkeyes

I can live with a higher rate because I understand that the costs to produce electricity have gone up. I have a problem with the part of the rate increase that will be going to a program to help others pay their bills though. I've had to make adjustments in my budget for rate increases, why can't others do the same? Why must I subsidize those who can't manage their money properly?

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