The Empire District Electric Co. filed a request with the Missouri Public Service Commission for changes in rates for its Missouri electric customers. The company is seeking an annual increase in base rate revenues of about $33.4 million, or about 7.3 percent.
If approved by the MPSC, a residential customer using 1,000 kWh would see a monthly increase of about $12.54.
The factor driving the rate request is the cost associated with the conversion of the Riverton Unit 12 natural gas combustion turbine to combined cycle operation. The conversion replaces the production capacity of retiring coal-fired generators at Riverton and carries a cost of between $165 and $175 million.
Scheduled to be complete in early to mid-2016, the project consists of a new heat recovery steam generator, steam turbine generator, auxiliary boiler, cooling tower and other balance of plant equipment. The conversion was necessary to comply with Mercury Air Toxics Standards mandated by the Environmental Protection Agency.
Other factors in the case include increased transmission expense, administrative and maintenance expense and costs incurred as a result of a mandated solar rebate program. The request also reflects cost-savings for customers resulting from revised depreciation rates and lower average interest costs.
In the coming months, the MPSC will perform an audit of Empire’s operations, hold public hearings, and conduct an evidentiary hearing. Any new rates granted would take effect at the conclusion of this process, typically in about 11 months, or late-summer 2016.
In this same filing, the company is asking to continue the use of the Fuel Adjustment Clause. The FAC provides for semi-annual adjustments to customers’ bills, based on the varying costs of fuel and purchased power used to serve customers.
The proposed FAC adjustment for the semi-annual period beginning December 1, 2015, coupled with adjustments reflected on customers’ bills over the previous 12 months, will result in a cumulative monthly reduction of $3.46 for a customer using 1,000 kWh.
A corresponding filing will also be made with the Oklahoma Corp. Commission using the Missouri proposed tariffs. An administrative rule providing rate reciprocity to any electric company who serves less than ten percent of its total customers within the state of Oklahoma took effect in August 2015.
The rule is intended to provide cost savings for customers related to rate case expenditures. As a result, future commission approved increases in Missouri rates will be effective for Empire’s Oklahoma customers subject to approval of the OCC.
Based in Joplin, Missouri, The Empire District Electric Co. is an investor-owned, regulated utility providing electric, natural gas (through its unit The Empire District Gas Co.), and water service, with about 218,000 customers in Missouri, Kansas, Oklahoma and Arkansas.