June 17, 2008
Midwest Energy case settled
CURB has entered into a settlement with Midwest Energy, Inc. (Midwest Energy) and Staff of the Kansas Corporation Commission that was filed on June 16th. The settlement, if approved by the Commission, results in a $9.25 million rate increase rather than the $10.02 million increase initially requested by Midwest Energy. Midwest Energy had subsequently adjusted its request to $10.5 million, and Staff of the KCC had recommended $9.7 million. Midwest Energy is cooperative owned utility.
CURB's decision to settle was based upon the need for substantial additional plant investment by Midwest Energy, concessions made by the company in the settlement, and the Commission's historical reluctance to deny rate increases to cooperatives (because the customers of cooperatives are also the owners of the cooperative).
Substantial investment by Midwest Energy in generation, transmission, and distribution plant was the driving force behind this rate case. The most significant factor was the costs related to the Goodman Energy Center, Midwest Energy's new generation facility. In addition, the company incurred and is incurring substantial storm damage costs (FEMA projects). Some of CURB's objections to the company's requested rate increase was that it included projected debt related to GMEC and FEMA projects that had not yet been issued. CURB believed Midwest Energy did not need funds for these projects until the costs had actually been incurred, which would leave cash in the pockets of its ratepayers/owners until these costs were actually incurred by the company. As part of the settlement, the company will file an abbreviated rate case within one year of the Commission's decision to address any additional costs related to GMEC and FEMA projects that have been incurred.
A hearing on the settlement will be held on June 23.KCC Docket No. 08-MDWE-594-RTS