Kansas City Power & Light Co. on Thursday filed for a 15.8 percent rate increase for about half of its Missouri customers, saying it needed to recover the cost of environmental upgrades at its coal-fired plant in La Cygne, Kan.
The utility said the $121 million-a-year rate request, if approved by the Missouri Public Service Commission, would amount to about a $14 monthly increase for the average residential customer.
“Government mandates have resulted in increased costs as we comply with environmental rules and provide cleaner power to our customers,” Terry Bassham, CEO and president of KCP&L, said in a statement.
The company said the federally required upgrade at the La Cygne plant — installing scrubbers to reduce air pollution — cost $1.21 billion. It will take 25 years for KCP&L customers to pay their share of the cost.
KCP&L has won approval for several rate increases over the last decade to pay for building new plants and retrofitting and upgrading older plants. If it gets full approval for the La Cygne increase, the affected KCP&L customers will be paying more than 50 percent more for power than they did a few years ago.
The rate increase for La Cygne would probably not go into effect until September 2015. State regulators can reduce or reject a rate request, but they have less flexibility to do so when it covers upgrades to meet environmental regulations.
KCP&L said the rate request covers about 270,000 of its 565,000 Missouri customers in its traditional territory, which includes most of Kansas City. The rest of its customers in western Missouri, including those in St. Joseph and in some area suburbs such as Raytown, will not have to pay for the upgrade.
Those customers were once served by Aquila, which was was acquired by KCP&L. They can expect a rate request by early 2016 to pay for a separate monthly fuel charge.
KCP&L will also file a rate request in Kansas to help pay for the La Cygne upgrade. But that rate increase is expected to be less because those customers have already started paying their share.
The cost of the upgrade at its La Cygne plant, the second-largest in KCP&L’s system, is being split with Westar Energy, KCP&L’s partner in the plant.
Environmental groups had opposed the upgrade. They contended there were better and cheaper options, such as converting the plant to use natural gas.
KCP&L’s filing in Missouri also includes a request to provide up to a $65 monthly credit to lower- and fixed-income customers to help pay for any possible rate increase.
It also said in the filing that it sought to recover some costs for replacing aging infrastructure, modernizing substations and making other improvements so it could respond faster to power outages. The utility said it also planned to expand its tree trimming program.
Upgrades have also been made to other power plants, such as the Wolf Creek nuclear power plant.
Also in the rate increase request is the need for more transmission lines, particularly to deliver renewable energy from remote areas to cities.