KCP&L seeks a 12.5 percent rate increase for its Kansas customers

Kansas City Power & Light Co. filed Friday for a 12.5 percent rate increase for its Kansas customers.

The utility attributed much of the request to governmental mandates to upgrade infrastructure at the Wolf Creek nuclear power plant and to install costly emission scrubbers at its La Cygne coal-fired plant.

KCP&L, which in October requested a 15.5 percent increase for many of its customers in Missouri, said in its filing with Kansas regulators it wanted an annual revenue increase of $67.3 million. The request, if granted by the Kansas Corporation Commission, would raise an average residential customer’s bill by about $144 a year.

“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,” Terry Bassham, president and CEO of KCP&L, said in a statement.

KCP&L has already raised rates in Kansas by 49 percent in the last decade, largely to pay for an energy plan that included building the Iatan 2 coal-fired power plant at Weston, Mo. The utility says that if the time period is stretched back to the late 1980s, its rate increases have trailed inflation.

The rate request filed Friday, like the one in Missouri, which is still pending, will in part go to help pay for a $1.2 billion environmental upgrade — scrubbers to reduce pollution — at the La Cygne plant. It’s splitting the cost with Westar Energy, the plant’s co-owner.

Environmental groups had opposed the upgrade. They contended there were better and cheaper options to cut pollution, such as converting the plant to use natural gas.

A bigger part of the utility’s Kansas rate request is for improvements to Wolf Creek, including replacing water pipes. KCP&L is one of the partners in Wolf Creek, about 90 miles southwest of Kansas City. It began generating power in 1985.

The utility will also use part of the increase to replace electric meters and pay for more tree trimming.

Any rate increase probably would not go into effect until October. State regulators can reduce or reject a rate request, but they have less flexibility for government-mandated expenses.

The rate increase being sought would also increase KCP&L’s financial rate of return, or profitability. James Zakoura, an attorney who represents KCP&L customers who are large users of electricity, said the 10.5 percent rate of return the utility wants is higher than what state regulators gave gas utilities in the last year.

“It will be a big issue in the case,” he said.

KCP&L has 247,000 customers in Kansas; all but 29,000 are residential.

The utility’s Missouri request covers 270,000 of its 565,000 Missouri customers in its traditional territory, which includes most of Kansas City. The rest of its Missouri customers would not pay the increase. They are in St. Joseph, some area suburbs such as Raytown, and other parts of western Missouri once served by Aquila Inc.

KCP&L in its latest filing said it wanted to bring Kansas a program it now has in Missouri that provides up to a $65 monthly credit to lower- and fixed-income customers to help them pay for any possible rate increase.

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

This story was originally published January 2, 2015 at 4:47 PM with the headline "KCP&L seeks a 12.5 percent rate increase for its Kansas customers."