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Empire District Electric Files for Missouri Rate Hike

June 22, 2016 By Cheryl Kaften

Empire District Electric (EDE) filed on June 21 (Docket No. ER-2016-0023) with the Missouri Public Service Commission (MPSC) for an increase in rates for its Missouri electric customers.

EDE is an investor-owned, regulated utility company, based in Joplin, Missouri, that provides electric, natural gas (through its wholly owned subsidiary, Empire District Gas), and water services to about 218,000 customers in Missouri, Kansas, Oklahoma, and Arkansas.

The utility is seeking an annual boost in base revenues of about $20.4 million or 4.46 percent. A residential customer using 1,000 kilowatt-hours (kWh) per month will see an increase of about $7.60 per month. This includes an increase in the monthly residential customer charge of $0.48.

The primary driver for the case, according to the filing, was the conversion of the EDE’s Riverton Unit 12 natural gas combustion turbine to combined cycle operation. The conversion – which is expected to yield higher generating efficiency and lower emissions – replaced the production capacity lost with the recent retirement of two coal-fired generating units at Riverton. The upgrade was developed as part of the utility’s least-cost plan to comply with Mercury Air Toxics Standards (MATS) mandated by the Environmental Protection Agency. The project was placed into service on May 1, at a total project cost of approximately $168 million excluding allowance for funds during construction (AFUDC).

The agreement filed on June 21 calls for the Fuel Adjustment Charge (FAC) to remain in effect. The agreed upon level of fuel and purchased power (FPP) cost included in base rates is $24.15 per megawatt-hour, compared to $26.84 per megawatt-hour in the company’s current rates. This reflects current FPP costs – which are lower than those built into current rates.

Annual funding for the utility’s Low Income Weatherization Program will increase from $225,000 to $250,000. The agreement also provides for the cost of state-mandated incentives to customers for private solar installations to be included in rates and amortized over a ten-year period.

“We are pleased all parties were able to come to a unanimous agreement in this case,” said EDE CEO Brad Beecher, adding, We are proud of the work completed at our Riverton Power Plant which will ensure we are able to continue to deliver safe, reliable and environmentally responsible energy for our customers well into the future.

He said, “The base revenues established by this agreement are lower than our request primarily due to continued lower fuel and purchased power costs. As a result of this stipulation, our 2016 earnings guidance of $1.26 to $1.44 per share … remains unchanged.”

If approved, new rates are expected to become effective in mid-September.

 

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