KANSAS CITY, Mo., Feb. 23, 2006 (PRIMEZONE) -- A settlement of Aquila, Inc.'s (NYSE:ILA) electric rate cases in Missouri was approved today by the Missouri Public Service Commission. The company serves approximately 300,000 electric customers in the state.
The change will increase the electric rates residential customers are currently paying in the company's former Missouri Public Service properties (MPS) by approximately 8.5 percent and about 5.5 percent for residential customers in its St. Joseph service area. The new rates become effective on March 1.
A typical MPS residential customer who uses 1,000 kilowatt-hours of electricity a month will see an increase of approximately $6.90 per month. Electric bills for a typical St. Joseph area residential customer would increase approximately $3.72 a month.
"We believe this is a fair settlement for both our customers and the company because it allows us to recover the cost of substantial investments we have made to provide safe, reliable electric service," said Jon Empson, senior vice president of regulated operations for Aquila. "The increase reflects only the costs of providing utility service for our Missouri customers."
The principal driver for the rate increases is to recover the higher costs of fuel used for energy generation, as well as investments made to meet the growing demand for electricity in the service areas.
As part of the settlement, the interim energy charge (IEC) will be discontinued for both MPS and St. Joseph area customers. The IEC surcharge of $16.1 million for MPS customers and $2.4 million was designed to recover the cost of purchased power and fuels used to generate electricity. IEC-related costs are now included in the new base rates.
The combined rate increases in Missouri are $44.8 million, or 10.2 percent in annual revenues. This includes a $38.5 million increase for MPS customers ($22.4 million with the IEC discontinuance), and a $6.3 million ($3.9 million with the IEC discontinuance) increase for St. Joseph customers.
In May 2005, the company originally requested a net $53 million, or 14.3 percent, increase over what its 240,000 MPS electric customers were currently paying, and a net $7 million, or a 6.2 increase for its 60,000 St. Joseph area electric customers.
Aquila also will contribute $193,000 annually for a low-income weatherization program for customers in its Missouri electric service area. In addition, Aquila currently has several programs to assist customers in Missouri, including its Aquila Cares low-income assistance program, as well as free residential and commercial energy audits.
Based in Kansas City, Mo., Aquila distributes electricity and natural gas to 346,000 Missouri customers. The company provides electricity and natural gas service to 1.3 million customers in Missouri, Kansas, Colorado, Michigan, Minnesota, Iowa and Nebraska. More information is available at www.aquila.com.
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