Missouri PSC investigating cost issues relating to multistate electric transmission projects

Concerned about recent developments involving the Southwest Power Pool and cost overruns of certain interstate electric transmission projects, the Missouri Public Service Commission has opened a proceeding to investigate and study SPP cost allocation and cost overruns.

Kansas City Power & Light Company, KCP&L-Greater Missouri Operations Company (which serves Nevada and the surrounding area) and The Empire District Electric Company are member electric utilities within the SPP. The costs to develop electric transmission projects within the entire SPP footprint will ultimately be shared by SPP's 61 members in nine states which include Missouri ratepayers of those utilities.

The SPP recently developed a list of priority transmission projects with an original estimated cost of $1.145 billion. In October 2010, that projected cost had increased by approximately 24 percent, to $1.416 billion, even before the first transmission pole was put in the ground. In addition, a meeting in January 2011 will consider further transmission projects with current proposals of $1.7 billion to $7.3 billion. There are currently approximately 49,000 miles of transmission lines in the SPP footprint and its members serve more than 6.2 million households.

The Commission has directed the PSC staff to investigate the Southwest Power Pool's process for selecting projects including cost estimates and cost-benefit analysis, the issue of novations and what to do about construction cost overruns for new transmission projects. The report is to be filed with the Commission by Dec. 31.

"This is a very important issue for the more than 730,000 electric customers in Missouri served by Kansas City Power & Light Company, The Empire District Electric Company and KCP&L-Greater Missouri Operations Company," said PSC Chairman Robert M. Clayton III. "A thorough and independent analysis of the cost versus the benefits to Missouri customers is needed to ensure that those customers are not inappropriately subsidizing economic benefits to other SPP customers."

It is the Public Service Commission's goal to finish its investigation no later than June 1, 2011, and make any recommendations for improving the process to the Regional State Committee for SPP.

The public is welcome to submit comments, either electronically or by mail, to the Public Service Commission in this matter. Electronic communications can be made through the electronic filing and information system or by mailing written comments to the Commission. Electronic comments may be submitted by going to the Commission's Web site at http://www.psc.

mo.gov and clicking on the EFIS/Case filings link on the left side of the page. Scroll down and click on the public comment link. Commenters should reference the case number (EO-2011-0134).

Written comments in hard copy should be addressed to the Public Service Commission, P.O. Box 360, Jefferson City, Missouri 65102 and should reference the case (EO-2011-0134).

This investigation will have no impact on the current rate increase case for KCP&L, the PSC said.