The Joplin Globe, Joplin, MO

November 1, 2012

Commission denies Empire’s bid for $6.2 million interim rate increase

By Wally Kennedy
The Joplin Globe

— The Missouri Public Service Commission has denied a request filed by The Empire District Electric Company to implement an interim electric rate increase, subject to refund, of approximately $6.2 million.

The interim rate increase would have amounted to an approximate 1.5 percent increase for electric customers of the company. The commission’s vote was 3-1.

Based upon the evidence in the case, the commission determined that Empire failed to meet its burden of proof to demonstrate that an interim rate increase is just and reasonable at this time.

“The overwhelming and undisputed evidence presented at the hearing shows that Empire is not now experiencing a financial emergency, or near emergency, and is able to provide safe and adequate service to its customers, regardless of whether or not it receives an interim rate increase,” said the commission.

“In addition, the commission has already taken regulatory action concerning the Joplin tornado by issuing an accounting authority order to protect Empire’s earnings until completion of its general rate proceedings. That order permits Empire to defer its tornado-related costs for potential recovery in rates until the conclusion of this rate case.”

On July 6, Empire filed an electric rate case with the commission seeking to increase annual electric revenues by approximately $30.7 million. Included in that request was an interim rate increase request of approximately $6.2 million.

Empire contended it should be permitted to charge its existing customers a higher rate immediately because it expended $27.6 million and lost many customers in the aftermath of the tornado.

“The commission agrees that the tornado was a devastating event for the people of those affected communities, and Empire deserves praise for its efforts in the clean-up and restoration following the storm,” said the commission.

“However, the issue for determination does not hinge on the past circumstances of May 2011, however extraordinary they may have been, but rather on Empire’s financial situation today and whether there are any present circumstances that would justify immediate rate relief.”

This decision addresses the interim rate request. The rate case which seeks to increase annual electric revenues by approximately $30.7 million is pending before the commission.

Formal evidentiary hearings are scheduled to begin in that case on Feb. 18.

Empire serves approximately 147,900 electric customers in the Missouri counties of Barry, Barton, Cedar, Christian, Dade, Dallas, Greene, Hickory, Jasper, Lawrence, McDonald, Newton, Polk, St. Clair, Stone and Taney.