Missouri regulators approve KCP&L rate hike, new 'inclining block' structure

Dive Brief:

  • The Missouri Public Service Commission unanimously approved a $32.5 million rate increase for Kansas City Power & Light Co. that is expected to raise average bills by about $4/month.
  • Midwest Energy News reports the commission has also directed the utility to begin using a new "inclining block" rate structure that will charge higher rates to customers who use more energy.
  • While the structure has support from renewable energy advocates, who say it will decrease payback times for rooftop solar, the utility is not a fan of the structure. The commission also rejected a network of electric vehicle charging stations the utility proposed, saying regulators did not have authority over the infrastructure.

Dive Insight:

A recent rate decision from Missouri regulators has KCP&L trying out a new rate structure that could help improve the economics of self-generation and efficiency upgrades. Beginning June, the four-month rate pilot will charge $0.129/kWh for the first 600 kWh, and then two cents more after that.

KCP&L had requested an annual revenue increase of more than $90 million, and a return on equity of 9.9%. In addition to the lower revenue increase, regulators also maintained the utility's ROE at 9.5%. The utility will use increased revenues to upgrade its infrastructure, add regional transmission lines, and complying with environmental and cybersecurity mandates.

The utility had also proposed a Clean Charge Network of electric vehicle charging stations in the Kansas City metropolitan region that it would own and operate. But the PSC denied the utility cost recovery, determining it did not have that authority.

“The commission finds that EV charging stations are not ‘electric plant’ as defined in the statute because they are not used for furnishing electricity for light, heat, or power,” according to the order.

The commission determined that EV charging stations are facilities that use "specialized equipment," to provide the service of charging a battery in an electric vehicle. "The battery is the sole source of power to make the vehicle’s wheels turn, the heater and air conditioner operate, and the headlights shine light. The charging service is the product being sold, not the electricity used to power the charging system," they concluded.

Last year, Kansas regulators made a similar decision. The Kansas State Corporation Commission in September said the utility had failed to demonstrate a need for the proposed Clean Charge Network. The utility had already installed 230 chargers out of a planned 315 on the Kansas side of the Kansas City metropolitan area, but then decided to hold off on the remaining 85. At the time, KCP&L said the Missouri portion of the program would remain active.

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Filed Under: Transmission & Distribution Solar & Renewables
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