Great Plains Energy Affiliate Files For Rate Increase

A unit of Great Plains Energy Incorporated (NYSE:GXP) , KCP&L, has sought approval from the Missouri Public Service Commission for a 7.5% hike in its rate base. This would, if approved, require customers to pay an additional $9 every month. The revised rate system is expected to be effective by May 2017.

Great Plains Energy engages in the generation, transmission, distribution and sale of electricity to customers located in all or portions of numerous counties in western Missouri and eastern Kansas.

Why the Rate Filing

Great Plain Energy has filed for the rate increase to recoup investments made for maintaining and improving the reliability of transmission lines and for adhering to various environmental regulations.

KCP&L has filed for another rate increase petition for its KCP&L Greater Missouri Operations Company customers, to redeem investments made for upgrading infrastructure and achieving compliance with environmental mandates.

KCP&L has also introduced customer assistance programs for assistance in bill payment and availing of bill credits.

Other Developments

Last month, Great Plains Energy announced that it has entered into an agreement to acquire Westar EnergyInc. (NYSE:WR) . The transaction has an estimated value of $8.6 billion and is anticipated to close in the spring of 2017, subject to regulatory approvals.

Upon closing of the transaction, Great Plains Energy will be able to cater to more than 1.5 million customers in Kansas and Missouri with a generation capacity of nearly 13,000 megawatts and gain access to around 10,000 miles of transmission lines and over 51,000 miles of distribution lines (read: Great Plains Energy (GXP) to Acquire Westar for $12.2 Billion).

Rate Filing from Other Utilities

We know that customers hardly like a rate hike, but rate hikes at regular intervals are quite essential for regulated utilities to sustain infrastructural development, enabling them to serve their customers more effectively.

Among its peers, Consolidated Edison Inc. (NYSE:ED) has also filed for a rate increase to finance capital spending for the modernization of its grid. The revised rate, if approved, is expected to take effect in Jan 2017. A NextEra Energy, Inc. (NYSE:NEE) unit, Florida Power & Light Company, filed for a rate hike in Mar 2016 for supporting long-term infrastructure investments.