July 31, 2008
The Empire District Electric Company Announces New Missouri Electric Rates
The Empire District Electric Company (NYSE:EDE) today announced that the Missouri Public Service Commission (MPSC) has issued an Order in the rate case filed by the Company on October 1, 2007. The Company had asked for an annual increase in revenues of approximately $34.7 million or 10.11 percent.
The Order results in a net increase in revenue of approximately $22.0 million, or 6.7 percent, and is based on a 10.8 percent return on equity. We anticipate the rates will go into effect by September 1, 2008.
With this case, the MPSC authorized a fuel adjustment for Empire's Missouri customers. The MPSC established a base rate for the recovery of fuel and purchased power expenses used to supply energy. Going forward, the fuel adjustment will be modified twice a year with Commission approval. If the fuel expense is less than the base, customers will see a credit. If the fuel expense is higher, customers will see an additional charge. This will be listed as a separate item and allows customers a more immediate view of what impact fuel expenses are having on their bill.
The Order contains two components. The first component provides an addition to base rates, which the Commission has reported is approximately $27.7 million. The second component is an amortization that provides Empire additional cash through rates during the current construction cycle. This construction, which is a part of the Company's long-range plan to ensure reliability, includes the facilities at the Riverton Power Plant and Iatan 2 Power Plant, as well as environmental improvements at the Asbury Power Plant and at Iatan 1. The second component related to regulatory amortization has been adjusted downward by $5.7 million. The regulatory amortization is now approximately $4.5 million.
The Commission also approved the Stipulation and Agreements providing for the recovery of deferred expenses for the 2007 ice storms and continuation of the pension and other post-retirement employee benefits trackers. The Commission also approved incorporation of the Staff's base fuel and purchased power figure of approximately $32.50 per megawatt hour, and established a two-way tracker for the cost of compliance with the vegetation and infrastructure reliability rules. The new rates will allow recovery of the capital additions for the 150-megawatt generating unit at the Riverton Power Plant, the selective catalytic reduction system at the Asbury Power Plant, and the 2007 ice storms.
For a residential customer using 1,000 kilowatt-hours monthly, the impact of the new base rates will be about $6.13 per month.
Bill Gipson, President and CEO, will host a conference call today, Thursday, July 31, 2008, at 4:00 p.m. Eastern Time to discuss the Missouri rate case. To phone in to the conference call, parties in the United States should dial 1-800-240-2430, any time after 3:45 p.m. Eastern Time. The presentation can also be accessed from Empire's website at www.empiredistrict.com. A replay of the call will be available for two weeks by dialing 1-800-405-2236 and entering passcode 11118164#. Forward-looking and other material information may be discussed during the conference call.
Based in Joplin, Missouri, The Empire District Electric Company (NYSE:EDE) is an investor-owned utility providing electric, natural gas (through its wholly owned subsidiary The Empire District Gas Company) and water service, with approximately 215,000 customers in Missouri, Kansas, Oklahoma, and Arkansas. A subsidiary of the Company also provides fiber optic services.
Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements address future plans, objectives, expectations, and events or conditions concerning various matters. Actual results in each case could differ materially from those currently anticipated in such statements, by reason of the factors noted in our filings with the SEC, including the most recent Form 10-K and 10-Q.