High Cost of Energy Hits Close to Home

By Anonymous

In the upward cost spiral of everything energy related — in other words, all things — add this to the disheartening list. Kansas City Power & Light now anticipates the company’s new power plant near Weston, Mo., will cost almost 47 percent more than originally planned. Note that a 47 percent increase in power plant construction generates an eye-opening number. Try $700 million. Note also that companies don’t absorb these cost overages. Power customers will do that.

The “yikes” factor aside, an escalating cost of the construction should come as no surprise to anyone who has recently bought anything. Inflation that plagues retail and grocery goods also touches materials and labor costs for heavy construction. One factor is energy costs, an irony that can’t be lost on Great Plains Energy Inc., the parent of KCP&L. Other factors are expansion of the plant’s capacity and changes in the facility’s pollution-reducing technology. Claims made to the Missouri Public Service Commission about initial cost estimates kept artificially low for corporate benefit are a matter for state investigators.

By KCP&L estimates, customer bills will rise by as much as 27 percent because of the new cost figures. Earlier, the company figured the increase might be just 20 percent. Two years ahead of the new power plant’s opening, the vice begins to tighten on already squeezed customers.

In St. Joseph, power consumers have more than a passing interest in these developments. Great Plains Energy has a deal in the works to purchase Aquila, the utility that provides electricity and other services to this city and other locales in Northwest Missouri. PSC commissioners wrapped up more than a week’s worth of hearings on the acquisition earlier this month. A decision on the case is expected this summer.

People of this region mostly take a positive view of the merger, with KCP&L and Great Plains seen as agreeable partners for local service and growth. But the implications of growing costs at a new $2 billion power plant creates an expected unease for ratepayers gun- shy from past utility surprises.

In his letter to the PSC supporting the Aquila-Great Plains transaction, state Sen. Charlie Shields of St. Joseph wrote, “Given these uncertain economic times and the rising cost of many daily staples, including food, fuel and energy, we need to take advantage of every opportunity to help Missourians keep their monthly electric bills as low as possible.” Indeed, if a selling point of the merger is the operational savings available with the combined companies, customers eventually should be satisfied. But all involved can excuse those customers a few jitters with this latest news.

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