Frequently Asked Questions
Here are a list of frequently asked questions about KCP&L's rate increase request and our Comprehensive Energy Plan:
- What is a rate case?
- Why is KCP&L asking for a rate increase at this time?
- How much is my bill going to increase?
- Why are rate increases in different parts of the KCP&L service territory different?
- How do I know which rate area applies to me?
- When will my bill increase?
- What do rates pay for?
- How can we be sure new rates will be fair and reasonable?
- With the economy, I’ve had to watch my spending. Why can't KCP&L cut back spending?
- What is the CEP? How does it benefit me?
- Has the economic downturn eliminated the need for this new coal plant?
- If rates here are still far below the national average, why has my bill gone up for many years?
- Will all types of customers — residential, commercial, and industrial — receive the same increase?
- Can I expect improvements in my electric service if my rates increase?
- How can I participate? Learn more?
A rate case is the way KCP&L proposes changes to the base rate we charge our customers. In Kansas, proposed rate changes are filed with the state regulatory commission, the Kansas Corporation Commission (KCC).
This rate increase request represents the successful completion of KCP&L's five-year Comprehensive Energy Plan (CEP). The request includes recovery for investments in new, cleaner and more efficient coal-fired generation, customer initiatives and system reliability improvements made as part of the CEP. This is the fourth of four planned rate increases associated with the CEP.
In Kansas, the proposed rate increase request will raise the typical residential customer’s bill by $11.08, or 11.5% each month. The typical residential customer in Kansas is defined as using 838 kilowatt hours (kWh) in the winter and 1,435 kWh in the summer.
In Missouri, the requests in each rate jurisdiction area will raise all customer rates an average of 14 percent. For the typical residential customer, this will add less than approximately $15 to the customer’s monthly bill. The typical residential customer is defined as using 780 kWh in the winter and 1,130 kWh in the summer. To see the specific requests for each rate jurisdiction area, please refer to the following table.
| Rate Jurisdiction* | Rate Increase | Rate Increase Percentage | Monthly Increase For Typical Residential Customer** |
| GMO (MPS) | $75.8 M | 14.4% | $14.86 |
| GMO (L&P) | $22.1 M | 13.9% | $12.82 |
| KCP&L (MO) | $92.1 M | 13.8% | $12.69 |
* Rate Jurisdiction Areas:
GMO (MPS): Represents the area served by the former Aquila Missouri Public Service division.
GMO (L&P): Represents the area served by the former Aquila St. Joseph Light & Power division.
KCP&L (MO): KCP&L Missouri customers (not in former Aquila service territory)
** A typical residential customer uses a monthly average of 1130 kWh in the summer and 780 kWh in the winter.
There are differences in the kinds of customers KCP&L serves in each state and differences in our cost to serve each group of customers. Also, the success of adequately setting rates in prior cases that adequately recovered operating costs and capital investments differs between regulatory jurisdictions. Finally, jurisdictions often set different mechanisms and time frames to recover certain types of costs. It is these differences that drive different pricing overall, and therefore different increases. In addition, assets, plant and equipment, used to serve customers in the former Aquila service area are separate and distinct from those that serve KCP&L customers. Thus, rates will be different between all the service areas.
If you are a residential customer, the best way to accurately identify which rate area you are in is to refer to the back page of your bill. As you can see in the graphics below, your rate code is a five-digit code that appears in the top-left portion of the back page of your bill. If you are a paperless billing customer and do not receive your paper bills in the mail, log in to AccountLink to view electronic copies of your bill and identify your rate code. Then refer to the following table to match your rate code to your rate area.
If you are a commercial or industrial customer, please contact your Energy Consultant for information about your bill and rate jurisdiction area.
If our request is approved by the regulatory commission in Kansas, we anticipate the Kansas rates will be effective in Dec. 2010. An approved procedural schedule has not yet been set for the Missouri filing. However, we anticipate the new rates would become effective for Missouri customers in the first half of 2011.
Rates, which must be approved by state regulators, are set to recover only essential costs related to providing safe, reliable and affordable service. This rate increase request represents the successful completion of KCP&L’s five-year Comprehensive Energy Plan (CEP). The request includes recovery for investments in new, cleaner and more efficient coal-fired generation, customer initiatives and system reliability improvements made as part of the CEP. Iatan 2, a new 850 Megawatt coal-fired generation unit, is scheduled to be completed in 2010. Iatan 2 will meet the growing electrical demand of our region and maintain competitive electric rates for decades to come. Customer initiatives include energy efficiency, customer affordability and demand response programs. Providing customers more information and control over their energy use helps them save money and also helps the environment. Investments in our transmission and distribution network ensure our ability to continue to deliver reliable electrical service and maintain our status as one of the region’s most reliable utilities.
We work hard to ensure that rates are fair and reasonable and work with regulators on that issue as well (state utility regulators must approve all rate increases). KCP&L's costs and operations are examined in detail, and rates are set to recover only those costs fundamental to providing safe, reliable and affordable service.
We have been managing our operating expenses very closely and will continue to do so. In addition, we’ve stayed on track to achieve the $500 million in operational efficiency savings we promised over 10 years as a result of the Aquila transaction. In fact, on our 2009 earnings call, we projected that we will exceed operational efficiencies by $98 million by 2014. Despite these efforts, the rate increase request is still necessary and was planned as the fourth and final rate increase associated with the Comprehensive Energy Plan. Energy affordability is a top priority for KCP&L. Prior to 2006, KCP&L had not sought a rate increase in 20 years. However, the manner in which the world generates, distributes and uses energy is changing. As it is necessary to meet the demands of these changes, KCP&L will work with regulators to set rates that are reasonable and fair.
In 2004, following an unprecedented amount of community input and engagement, KCP&L introduced its Comprehensive Energy Plan with a number of short- and long-term goals. The plan was designed to allow KCP&L to provide the electricity needed to support the region’s economy in the future; maintain competitive electric rates; continue to deliver reliable service; balance the benefits of renewable energy with the stability of cleaner coal generation; and respond to rapidly evolving environmental laws and regulations with flexible and sustainable solutions. The CEP has a number of important customer benefits, including:
- Renewable Energy: KCP&L's Spearville wind facility was completed on time and under budget and gives KCP&L access to a source of clean renewable energy.
- Affordability and Energy Efficiency: Providing customers more information and control over their energy use helps them save money and also helps the environment. In addition, our new Connections program was designed to help customers manage their electric bills even in a tough economy.
- Environmentally-Responsible Power: New environmental technology at our coal-fired power plants is helping KCP&L improve regional air quality and meet future federal emissions mandates.
- Infrastructure Improvements: Investing money in our power lines and infrastructure maintains award-winning reliability; in other words, it helps us prevent outages and/or get the lights back on faster when an outage occurs. KCP&L continues to be recognized as one of the Midwest’s leading utilities in terms of reliability.
- New generation: A new clean-burning coal power plant ensures that our region has a sufficient supply of affordable electricity for years to come.
No. Even in our current economy, the demand for electricity has increased. Additionally, we have recently seen the retirement of 30 gigawatts of existing generation capacity in the U.S. Experts estimate that we will need 250 gigawatts of new generating capacity between 2008 and 2030 (http://www.eia.doe.gov/oiaf/aeo/electricity.html).
That is approximately 300 times the generating capacity of Iatan 2. When we made the decision to build a new coal-fired plant five years ago, we were in lock step with the community and regulators. We made this decision because it was, and still is, the best way for us to maintain reliable affordable service in the long term — 40 or more years. Though prices for natural gas are currently low, history tells us this will not be the case forever as gas pricing is volatile. We believe coal, which is the least expensive generating fuel, will continue to be a price-stable, reliable resource. The economic downturn has not eliminated the need for Iatan 2.
The price KCP&L-Kansas customers paid for each kilowatt-hour of electricity actually decreased several times from 1988 to 2006 (see chart). KCP&L's Missouri territories also experienced price decreases (see chart). In 2007, KCP&L filed its first rate increase in 20 years. The majority of the increase in your bill over the years has been the amount of electricity you actually use. On average, KCP&L residential customers use 42 percent more electricity today than in 1986. To illustrate that, the average number of TVs per household has increased more than 33 percent, and a 50-inch plasma unit uses four times the energy of a standard 27-inch set. Add to that the fact that average square footage for homes in our area has gone up by 18 percent over the same period, and it becomes clearer why bills have risen.
We are asking for an equal percentage increase for all types, or classes, of customers within each rate jurisdiction.
KCP&L currently ranks among the best electric utilities in the country when it comes to customer service and reliability. The Comprehensive Energy Plan calls on us to maintain this high level of confidence, customer service and reliability. Therefore, part of this rate increase request goes towards continued improvements to our delivery system to ensure service reliability.
As part of the rate case process, the Kansas Corporation Commission held a public hearing to review the merits of proposed rate changes. This was an opportunity for the public to come forward and ask questions or raise concerns. Comments may also be submitted to the Kansas Corporation Commission until July 30, 2010. There will be similar opportunities for Missouri customers to voice their comments. A schedule for these opportunities has not yet been determined, but we will share it with you here when it becomes available.
