Evergy Missouri West is planning to make some annual adjustments that will likely result in a higher energy bill. A winter storm from a year ago is to blame.
Evergy Missouri West filed a request with the Missouri Public Service Commission to modify the fuel adjustment charge on the bills of its electric customers. The adjustment reflects fuel and purchased power costs for the six-month period of June 2021 through November 2021.
What does this mean for Raymore residents’ electric bill?
Specifically, Evergy Missouri West wants to increase the fuel adjustment charge to $0.00659 per kWh for residential customers. According to a news release, a residential customer using 1,000 kWh a month will see the monthly fuel adjustment charge increase by approximately $4.65 a month, which will result in a fuel adjustment charge of approximately $6.59 per month on a residential customer’s bill. Changes will go into effect on March 1 if approved.
That is in addition to the Demand Side Programs Investment Mechanism (DSIM) charge increase of nearly $2 a month per 1,000 kWh, which goes into effect Feb. 1. Furthermore, Evergy Missouri West is seeking a net increase of nearly 4% in its electric base rates.
If this seems like a large increase, that’s because it is. Below is an explainer of how we got here.
What is a fuel adjustment charge?
A fuel adjustment charge has been around since 2006 after legislation was passed to address the volatility of fuel prices.
Sponsored by then Missouri state Sen. John Griesheimer, R-District 26, SB179 of 2005 allows utility companies to “utilize periodic rate adjustments to recover costs related to environmental compliance.” Essentially, the act allows Evergy Missouri West to make up for any unexpected changes in costs due to weather or conservation.
The act gives utility companies an opportunity for an annual true-up, which is a correction of any over or under collections through subsequent rate adjustments or refunds. According to the commission, fuel adjustment charges allow utility companies to recover most – up to 95% – of its costs, but not all, to encourage conservation and prudence in fuel use by the company.
Any charges passed to the customer because of an approved adjustment must be separately disclosed on each customer bill. Residents can find it on the second page of their Evergy bill under “FAC Chg.”
However, all adjustments must be approved by the Missouri Public Service Commission, which regulates private sector utility companies. The commission consists of five commissioners appointed by the governor. According to its website, the Public Service Commission is set up to:
• Ensure that Missourians receive safe and reliable utility services at just, reasonable and affordable rates.
• Support economic development through either traditional rate of return regulation or competition, as required by law.
• Establish standards so that competition will maintain or improve the quality of services provided to Missourians.
• Provide the public the information they need to make educated utility choices.
• Provide an efficient regulatory process that is responsive to all parties, and perform our duties ethically and professionally.
Evergy West provides electric service to approximately 347,400 customers in the Missouri counties of Andrew, Atchison, Barton, Bates, Benton, Buchanan, Carroll, Cass, Cedar, Clay, Clinton, Dade, Daviess, DeKalb, Gentry, Grundy, Harrison, Henry, Holt, Jackson, Johnson, Lafayette, Livingston, Mercer, Nodaway, Pettis, Platte, Ray, St. Clair, Vernon and Worth.
Why a significant increase this year?
Changes to fuel adjustment charges occur every six months and do not always result in an increase this large. In fact, some adjustments result in a decrease.
Evergy Missouri West files a proposed fuel adjustment charge every January and July. Approval from the Missouri Public Service Commission is granted every February and August, with changes going into effect in March and September. Before KCP&L and Westar Energy merged to become Evergy in 2018, changes occurred every October and April. Below are the last several fuel adjustment charges per 1,000 kWh:
• September 2021 – $1.94
• March 2021 – $0.81
• September 2020 – $0.02 (credit)
• March 2020 – $1.75
• October 2019 – $0.73
• April 2019 – $4.09
From September 2020 to March 2021, Raymore residents saw their energy bill decrease by 2 cents for every 1,000 kWh each month. If approved, residents will see their bill go up $4.65 per 1,000 kWh to $6.59 beginning in March.
According to a letter from Evergy to the Missouri Public Service Commission, the updated adjustment is “for ‘extraordinary costs’ incurred as a result of the mid-February 2021 cold weather event known as Winter Storm Uri.” That storm devastated large swaths of Texas not used to extreme cold temperatures, including Houston.
The Southwest Power Pool, which includes Evergy, experienced the greatest operational challenge in its 80-year history during Winter Storm Uri, according to its website. SPP kept generating power across its region with two short exceptions that lasted about four hours.
According to testimony given by Evergy Missouri West’s manager of regulatory affairs, this may not be the last adjustment caused by Winter Storm Uri, suggesting another increase in September.
Residents wishing to comment can contact either the Office of the Public Counsel (Governor Office Building, 200 Madison Street, Suite 650, P.O. Box 2230, Jefferson City, Missouri 65102-2230, telephone (866) 922-2959, email email@example.com) or the Public Service Commission Staff (P.O. Box 360, Jefferson City, Missouri 65102, telephone 1-800-392-4211, email firstname.lastname@example.org).
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