Kansas City Power & Light, a subsidiary of Great Plains Energy (NYSE: GXP), said April 20 that it has filed a rate increase request with the Kansas Corporation Commission (KCC) that includes costs for environmental upgrades at its coal-fired La Cygne power plant.
The company is seeking to raise rates 12.9%, with the new rates to be effective in January 2013.
“While KCP&L continues to manage costs and minimize the amount and impact of any rate increase on our customers, the costs associated with generating and delivering electricity continue to increase,” said Terry Bassham, KCP&L President and COO. “Specifically, our investments in additional renewable energy and environmental upgrades at our existing facilities are important steps to building a balanced generation portfolio and ensuring that we are doing our part to improve regional air quality.”
Among the drivers for the increase are the significant investments the company has made at its generating facilities that will allow KCP&L to meet future state and federal renewable energy and emissions control mandates. These investments include additional wind generation in Spearville, Kansas, and environmental upgrades at La Cygne, one of the company’s largest coal-fired facilities.
KCP&L is making major environmental upgrades at La Cygne, which is jointly owned by KCP&L and Westar Energy (NYSE: WR). The two units at La Cygne make up the second largest station in KCP&L’s system and produce 1,400 MW. Included in this rate increase request are costs that have been incurred to date to construct and install air quality control equipment at La Cygne. These upgrades are required to meet future state and federal environmental regulations and include installation of a new chimney to serve both units, baghouses (which reduce particulate matter) and a selective catalytic reduction (SCR) system on Unit 2 to reduce NOx emissions. A SCR system was installed on La Cygne Unit 1 in 2007.
KCP&L said it considered several options for meeting the environmental regulations, including retrofitting the facility for natural gas as a fuel source and shutting down the plant. Making the environmental upgrades and continuing to operate the coal-fired facility proved to be the lowest cost option for customers. In August 2011, as part of a predetermination case in Kansas, the KCC approved the project and cost estimates. Construction is underway and the project is expected to be completed in June 2015.
Headquartered in Kansas City, Mo., Great Plains Energy is the holding company of Kansas City Power & Light and KCP&L Greater Missouri Operations, two of the leading regulated providers of electricity in the Midwest.