The Missouri Public Service Commission has directed Kansas City Power & Light Co. to offer stand-by electric services to self-generation customers at market-based prices.
The rate design approved by the commission allows the utility to recover stranded costs that might otherwise be shifted to customers who continue to take bundled electric service on the utility's regulated distribution system.
The PSC approved a plan proposed by its staff that would require the utility to employ "real-time pricing" for the energy component. An access charge would reflect the difference between the utility's embedded costs and the hourly market price for a baseline level of usage drawn from individual customer billing records.
The utility had proposed a stand-by tariff for backup, maintenance and supplementary energy services at prices based on the embedded costs of generation, and which would include an access charge. The commission agreed with the utility that an access charge for recovery of stranded costs associated with self-generation is appropriate. But it ruled that the overall price for the service should also reflect the cost of power in the wholesale bulk power market rather than the embedded cost of the utility's generation assets.
The commission rejected allegations that both access charge proposals discriminated against QF customers, hindered competition, and sheltered the utility from the "consequences of its own inefficiencies in generation planning." Re Kansas City Power & Light Co., Case No. et-97-113, July 13, 1997 (Mo.P.S.C.).