For immediate release
Friday, June 23, 2000
St. Joseph Light & Power Company today filed an
application for an Accounting Authority Order (AAO) with
the Missouri Public Service Commission (PSC).
The application seeks authority for deferral of
costs incurred by the company as a result of the June 7
fire at the company's Lake Road power plant.
While the incident is still being investigated, it
is believed lubricating oil in a turbine-generator at
the Lake Road power plant in St. Joseph caught fire.
The fire resulted in the unplanned shutdown of the
company's turbine 4/boiler 6 electric generator. The 4/6 unit
produces 97 megawatts of power, and meets more than 25
percent of the company's electric system requirements.
Because of the loss of the 4/6 unit, the company
now is required to purchase significant amounts of
replacement electricity to meet customer requirements.
The cost of that replacement power is significantly
greater than the cost of producing electricity by the
4/6 unit.
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Light & Power expects it will be necessary to continue
purchasing replacement power until the 4/6 unit is repaired
and back in service.
Current estimates of the cost for replacement energy
above 4/6 energy costs and unit repair costs, and after
insurance coverage is applied, are about $7.1 million.
These estimates are based on a projected unit in-service
date of Sept. 1. Those costs are considered extraordinary
and significant and are not reflected in Light &Power's
electric rates set by the PSC.
As a consequence of these events, the company's
PSC application seeks authority for a deferral of costs
incurred as a result of the incident. The company also
is proposing, that in the company's next general rate case,
these costs would be recovered in electric rates over a
five-year period. The company requests the accounting
procedure be approved by year-end.
The company believes the pending merger could make
the AAO unnecessary if the PSC approves the regulatory
plan proposed by UtiliCorp United Inc. and St. Joseph
Light & Power Company that includes a five-year rate
moratorium.
Merger hearings before the PSC are scheduled for the
week of July 10.
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Contact: Jerry Musil
816-387-6236 (office)
816-262-0374 (cellular)
816-233-5980 (home)
[email protected] (e-mail)
