The Empire District Electric Company Announces Stipulation and Agreement in Missouri Rate Case
The Empire District Electric Company (NYSE:EDE) announced today that it
has filed a Unanimous Stipulation and Agreement with the Missouri Public
Service Commission (MPSC) for changes in rates for its Missouri electric
customers. The agreement, if approved by the MPSC, allows an annual
increase in base revenues of about $20.4 million or 4.46 percent. A
residential customer using 1,000 kilowatt-hours per month will see an
increase of approximately $7.60 per month. This includes an increase in
the monthly residential customer charge of $0.48. If approved, new rates
are expected to become effective in mid-September.
The primary driver for the case was the conversion of the Company’s
Riverton Unit 12 natural gas combustion turbine to combined cycle
operation. The conversion replaced the production capacity lost with the
recent retirement of two coal-fired generating units at Riverton. The
conversion will result in higher generating efficiency and lower
emissions. The upgrade was developed as part of the Company’s least-cost
plan to comply with Mercury Air Toxics Standards (MATS) mandated by the
Environmental Protection Agency. The project was placed into service on
May 1, 2016 at a total project cost of approximately $168 million
excluding AFUDC.
The agreement filed today calls for the Fuel Adjustment Charge (FAC) to
remain in effect. The agreed upon level of fuel and purchased power
(FPP) cost included in base rates is $24.15 per megawatt-hour, compared
to $26.84 per megawatt-hour in the Company’s current rates. This
reflects current FPP costs which are lower than those built into current
rates.
In addition, a tracking mechanism for non-labor operating and
maintenance expenses for the Riverton 12 Combined Cycle Unit will be
established and tracking of pension and other post-employment benefit
expenses will continue.
Annual funding for the Low Income Weatherization Program will increase
from $225,000 to $250,000. The Company’s current level of funding for
energy efficiency programs will continue through the end of 2016. A new
portfolio of programs will be examined during the next several months in
preparation for an expected launch in early 2017.
The agreement also provides for the cost of state mandated incentives to
customers for private solar installations to be included in rates and
amortized over a ten year period.
According to Brad Beecher, President and CEO, “We are pleased all
parties were able to come to a unanimous agreement in this case. We are
proud of the work completed at our Riverton Power Plant which will
ensure we are able to continue to deliver safe, reliable and
environmentally responsible energy for our customers well into the
future.” Beecher added, “The base revenues established by this agreement
are lower than our request primarily due to continued lower fuel and
purchased power costs. As a result of this stipulation, our 2016
earnings guidance of $1.26 to $1.44 per share, which was updated
February 26, 2016, remains unchanged.”
Based in Joplin, Missouri, The Empire District Electric Company
(NYSE:EDE) is an investor-owned utility providing electric, natural gas
(through its wholly owned subsidiary The Empire District Gas Company),
and water service, with approximately 218,000 customers in Missouri,
Kansas, Oklahoma, and Arkansas. A subsidiary of the Company also
provides fiber optic services. For more information regarding Empire,
visit www.empiredistrict.com.
The updated earnings guidance range assumes 30-year average weather,
overall system energy growth of less than 1%, increased operating costs
driven by a partial year of service from the Riverton 12 combined cycle
conversion, an October 1, 2016 effective date for new Missouri electric
customer rates as a result of the aforementioned agreement, and the
expected incurrence of certain transaction costs associated with the
proposed Agreement and Plan of Merger with Liberty Utilities, a
subsidiary of Algonquin Power & Utilities Corp. Other factors that may
impact earnings include variations in customer growth and usage
projections and unanticipated or unplanned events that may impact
operating and maintenance costs. The effects of assumptions and other
factors evaluated for the purpose of providing guidance are not
necessarily independent of one another, and the combination of effects
can cause individual impacts smaller or larger than the indicated
guidance range.
Certain matters discussed in this press release are “forward-looking
statements” intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of 1995. Such
statements address future plans, objectives, expectations, earnings, and
events or conditions concerning various matters. Actual results
in each case could differ materially from those currently anticipated in
such statements, by reason of the factors noted in our filings with the
SEC, including the most recent Form 10-K and 10-Q.
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