KCP&L Files Rate Increase Request with Kansas Corporation Commission

The utility is seeking to recover costs associated with federally mandated environmental upgrades and reliability investments

KANSAS CITY, Mo.--()--Kansas City Power & Light Company (KCP&L), a subsidiary of Great Plains Energy Incorporated (NYSE: GXP), today filed a rate increase request with the Kansas Corporation Commission (KCC) to increase rates for electric service in its Kansas service area. The increased rates would result in a $67.3 million revenue increase, or a 12.5 percent increase. The increase will raise the monthly bill for a typical residential customer by $11.67 per month. The rate request process takes approximately eight months in Kansas, and any new rates are expected to become effective on or around October 1, 2015.

“We know rate increases can be difficult for customers and that’s why we want to offer financial assistance and flexible bill payment options”

Among the reasons for the increase request are government-mandated environmental equipment upgrades at La Cygne, one of KCP&L’s largest and lowest cost coal-fired power plants. This environmental project is required in order for La Cygne to continue operating after environmental regulations are effective in June 2015. Once the project is done in 2015, all of KCP&L’s large base-load coal units will be in compliance with current environmental rules and regulations.

Additional reasons for the proposed increase include infrastructure and system improvements that help maintain the overall reliability of KCP&L’s electrical system, such as upgrades to the Wolf Creek nuclear power plant and the replacement of electric meters.

“We work to manage electricity costs and are focused on offering customers competitive electricity prices,” said Terry Bassham, President and CEO of Great Plains Energy and KCP&L. “However, our costs to serve Kansas customers have increased significantly over the last decade due in large measure to government mandates impacting our industry. This rate increase request is necessary in order to meet the required mandates and continue providing reliable, cleaner electricity to this region for decades to come.”

The utility previously announced a rate increase request for its KCP&L Missouri service area in October 2015 and is required to file a rate request for its KCP&L Greater Missouri Operations Company service area by early 2016. A map of KCP&L’s different service areas can be found at www.kcpl.com/servicearea.

Environmental Upgrades at La Cygne Power Plant

Upgrades at the La Cygne power plant, the second largest coal-fired power plant in KCP&L’s system, are needed in order to comply with recent Environmental Protection Agency (EPA) regulations. La Cygne produces a significant amount of the electricity this region relies on and is also one of the lowest cost coal-fired power plants in KCP&L’s fleet. It helps keep electricity prices affordable for both residential and business customers.

The environmental upgrade project began in September 2011 and includes the installation of baghouses and wet scrubbers, a new chimney to serve both units, and a selective catalytic reduction system. All of this equipment helps reduce emissions, improve air quality, and further KCP&L’s commitment to providing customers cleaner energy. Construction is expected to be completed by June 2015, and is currently on schedule and at or below budget.

In Kansas, KCP&L is allowed to recover some costs in rates while projects are in the construction phase. These incremental increases in rates over the duration of the construction reduced the need to file a larger rate increase request now. These smaller, more gradual increases also make it easier for customers to manage and budget for their monthly energy bill. Therefore, some of the costs associated with the La Cygne upgrades have already been recovered in previous rate cases.

Infrastructure and Reliability Investments

KCP&L has also continued to invest in the communities it serves by making significant reliability improvements over the past few years, and is seeking to recover costs associated with those projects. These investments include replacing aging infrastructure and making system improvements, such as modernizing substations. Both types of projects allow KCP&L to respond even quicker to power outages and help ensure customers receive the most reliable electrical service in the region.

Other infrastructure improvements include the replacement of electric meters in the Kansas service area, which will help identify potential outages quicker. KCP&L has also made upgrades to the Wolf Creek nuclear power plant and additional upgrades are planned for 2015. KCP&L also plans to expand its tree trimming program, which helps the company maintain its position as the most reliable utility in the Midwest and results in better reliability for customers.

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, help utilities like KCP&L deliver energy across its service area. As more and more renewable electricity, like wind power, needs to get from rural to urban areas, the need for transmission lines is growing. 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

As part of this rate increase request, KCP&L is also asking for the ability to offer a popular Missouri payment assistance program to its Kansas customers. The Missouri Economic Relief Pilot Program (ERPP) currently offers a monthly bill credit to income-eligible customers. KCP&L is requesting to offer the same program in Kansas, with up to a $65 monthly bill credit amount. This program would help eligible Kansas customers better manage their energy costs.

ERPP currently helps relieve some of the financial hardships experienced by lower to moderate-income, working-class Missouri customers. The utility would like to make this program available to all its customers who typically wouldn’t qualify for government-assistance programs. A full list of the bill-payment assistance programs KCP&L offers to customers can be found at www.kcpl.com/assistance.

“We know rate increases can be difficult for customers and that’s why we want to offer financial assistance and flexible bill payment options,” said Bassham. “The new customer program we are requesting has provided financial assistance to thousands of lower-income and fixed-income Missouri customers and we hope to be able to offer this program to those same Kansas customers as well.”

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

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.

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