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November 02, 2007
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Midwest Energy Files Electric Rate Increase Request
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Midwest Energy announced that it has filed a revised request with the Kansas Corporation Commission (KCC) to increase its electric rates. The revised request is for $10.0 million and will affect all Midwest Energy customers. The original $6.4 million request did not include customers on the cooperative's W System. A recent KCC ruling cleared the way for the W System rate changes in 2008 at the conclusion of a 5-year rate moratorium. The revised request will delay the originally proposed effective date by two months to September 1, 2008.
If approved, the request would result in an average increase of 10.5% in customers' monthly bills. Since the last rate case in early 2003, the company has made major investments in upgrading service to customers. The company's base rates have remained essentially unchanged since 1989. If approved, an average residential customer's bill would increase by approximately $13.01 per month.
"In addition to the investment in system improvements we have made since our last rate case, we are in the early stages of other needed improvements to and replacement of our electric system for reliability," said Earnie Lehman, President and General Manager of Midwest Energy. Most notable on the cooperative's list of construction activities is the Goodman Energy Center, a 76 MW natural gas fired peaking power plant being built near Hays. The generating plant will replace some expiring power supply contracts and will be fully operational by the fall of 2008.
Lehman also noted recent storm damage as contributing to the rate request. "Two ice storms that preceded the December 2007 storm and the May, 2007 Greensburg tornado resulted in over $90 million in damages. FEMA and the State of Kansas will assist with the lion's share of rebuilding costs, but even the remainder is beyond our normal construction budget," said Lehman. Damages from this month's ice storm have not been tallied and are not a part of the rate request. Additionally, extraordinary events such as the 2005 Gulf Coast hurricanes and explosive economic growth in markets such as China have resulted in materials cost increases well above the cost of inflation.
The KCC has 240 days to issue a ruling on Midwest Energy's application. Midwest Energy, headquartered in Hays, KS, is a customer-owned cooperative serving 48,000 electric customers and 41,000 natural gas customers in 41 central and western Kansas counties.
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