Kansas to allow KCP&L to boost electric rates 9 percent; regulators divided over some issues

IndustriesAssociated Press

About 247,000 northeastern Kansas households and businesses will see their annual electric rates increase by 9 percent under changes that state regulators approved Thursday for Kansas City Power & Light Co.

The Kansas Corporation Commission's three members were split over the profits that KCP&L stockholders will be allowed to earn in Kansas and over charges to consumers with electric heating systems. Dissenting Commissioner Pat Apple also said he's concerned Kansas customers are paying higher rates than their Missouri counterparts and he called for a review.

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The commission said KCP&L's annual revenues will rise by nearly $49 million, though that figure includes charges for its property taxes and transmission costs already being passed onto consumers. No figure was immediately available for how much average residential customers' monthly bills will increase.

The KCC issued its rate-setting order a week after Missouri regulators approved an 11.7 percent increase in rates for about 270,000 KCP&L customers in 10 counties there, including most of the Kansas City area.

Regulators in both states approved smaller increases than KCP&L sought. The company said it needed additional revenue to pay for upgrades, including environmental improvements at a coal-fired power plant in LaCygne in eastern Kansas. New Kansas revenues also would help pay for upgrades at the Wolf Creek nuclear power plant, about 55 miles south of Topeka.

"I think on balance, it's a pretty good deal for consumers," said David Springe, the chief attorney for the Citizens' Utility Ratepayers Board, a state agency representing residential customers and small businesses.

A KCP&L spokeswoman did not immediately respond to a telephone message seeking comment.

In Kansas, KCP&L sought to boost annual revenues by $67 million, up 12.5 percent and $11.67 a month for average residential customers. It proposed allowing a 10.3 percent annual profit for stockholders, up from 9.5 percent set previously.

The new figure will be 9.3 percent. The order approved by KCC Chairwoman Shari Feist Albrecht and Commissioner Jay Emler cited a national trend toward reigning in profits to reflect "historic low costs" of borrowing.

Apple said during a brief KCC meeting that a proposal from the ratepayer board to cap profits at 8.55 percent was reasonable, given questions about differences in rates in Kansas and Missouri.

Springe and the KCC's staff have attributed differences to KCP&L having a higher percentage of residential customers in Kansas and being allowed under state law to collect some costs up front.

But Apple, a former state senator from Louisburg, said: "I still think it is our obligation to look into these issues further, as Kansas consumers and businesses are at a disadvantage."

Apple also opposed the KCC's order because it doesn't decrease rates charged in fall and winter to up to 50,000 customers with electric heating, many in growing Kansas City suburbs in southern Johnson County. Apple's former legislative district included southern Johnson County.

A decade ago, KCP&L discounted such charges by as much as 51 percent to encourage the use of electric heat, but in recent years, the commission reduced the discounts to as little as 10 percent. Apple said customers were "lured" into electric heat then treated "callously."

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Online:

Kansas Corporation Commission's order: http://1.usa.gov/1MetKU8

Kansas City Power & Light Co.: http://www.kcpl.com/

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Follow John Hanna on Twitter at https://twitter.com/apjdhanna .