Kansas utility legislation wants smaller, more frequent rate hikes
- Missouri state Sen. Ryan Silvey has introduced a measure to potentially allow Kansas City Power & Light to raise its base rates more frequently, but in smaller and more predictable steps.
- The proposal would allow the utility to submit the previous year's cost, with the expectation that regulators would approve rates for the following year based on those expenses. Annual revenue increases would be capped at a rolling average of 3.5%, according to The Kansas City Star.
- The bill is designed to alleviate the shock of larger rate increases, like the almost 12% spike KCP&L enacted last September in its Kansas City territory.In two other service territories, the utility requested an 8% increase last month.
The laws regulating Missouri utilities are 103 years old and in need of an overhaul, Sen. Silvey told The Kansas City Star.
“Our hope is that we can come up with a modern system that works for today’s issues,” Silvey told the newspaper. “A lot has changed in the utility space and how we utilize electricity in the last 103 years.”
Silvey is backing a proposal to allow KCP&L more frequent rate increases, basing potential annual bumps on the previous year's expenses. While that would mean increases more in the 2% to 4% range, critics of the legislation say there is nothing keeping the utility from raising rates every year.
The law would allow, however, regulators to reject the expenses if they are proved "imprudent." And the Star reports some advocates in the state are supportive of the relatively low caps on annual rates.
Power rates in Kansas City went up 11.7% last year, and KCP&L Greater Missouri Operations Co. last month filed a request with the Missouri Public Service Commission to increase base rates by 8.2% in two other combined jurisdictions. If approved, the increase would result in an average residential customer paying approximately $9 more each month.
The utility said rate requests take about 11 months, and the new rates could take effect next January. KCP&L also noted that it has been four years since it requested a rate increase for that portion of its service territory.
“Our employees work hard to manage costs and ensure we provide electricity at competitive rates,” said Terry Bassham, President and CEO of Great Plains Energy and KCP&L, said in a statement. “However, in order to continue to provide reliable power and excellent customer service we’ve recently upgraded infrastructure and other critical systems. This request is a reflection of those significant investments that allow us to better serve our customers.”
Follow Robert Walton on Twitter