On May 28, 2021, Liberty filed a request with the Missouri Public Service Commission (MPSC) to adjust electric base rates. The new rates would take effect in 2022 and reflect Liberty’s efforts to better serve customers through the transition to clean, less expensive renewable energy; investments to strengthen and modernize infrastructure and systems; and steps to lessen the impact of extreme weather events related to Winter Storm Uri.
If approved by regulators, the rate adjustment in 2022 for Liberty’s investments would cost an average Liberty Missouri electric customer approximately $12.76 per month, or 9.68%, based on approximately 1,000 kilowatt-hours of usage per month. In addition, to keep energy affordable and assist its customers, Liberty proposes to spread the costs of the fuel charges for Winter Storm Uri over 13 years, rather than the standard six months through the bi-annual Fuel Adjustment Clause (FAC). This proposal to spread out costs is expected to result in customers paying approximately $7.08 per month over 13 years rather than the anticipated FAC rate of $81 per month over six months.
A rate case is a public regulatory review process in which a utility must demonstrate to its state public service commission why a proposed change in rates is needed. This independent public process helps ensure transparency and fair rates based on the costs to serve customers.
Liberty is required to provide every customer in our service area with safe and reliable electricity at rates approved by the public service commission of each state. In exchange, the utility is allowed the opportunity (not a guarantee) to earn a fair return for investors. Even though our regulators will ultimately determine any changes to customer rates, we pledge to do our part to keep rates as reasonable as possible.
First, Liberty must demonstrate to state utility regulators why a rate change is needed. The Missouri Public Service Commission (MPSC) and other interested stakeholders review our filings and vet the company's request. The MPSC then thoroughly reviews our request and holds public hearings to allow customers to comment. This process could take up to 11 months.
Liberty offers programs to encourage energy efficiency and assist our limited-income customers. Liberty also provides flexible payment options to customers who may be experiencing financial hardship. During the pandemic, this included moratoriums on service disconnections, expanded payment programs, and connecting customers to additional community and government resources to assist them.
Transitioning to clean, renewable energy that is expected to save customers money over the long term compared to other energy generation. This includes Liberty’s recently completed 600-megawatt wind energy project consisting of three wind farms: North Fork Ridge and Kings Point in Southwest Missouri and Neosho Ridge in Southeast Kansas. It also includes Prosperity Solar Facility near Joplin, Missouri, Liberty’s first Community Solar project.
Providing customers with more control and rate plan choices to help manage and lower their monthly bill through the installation of smart meters and new, convenient customer service platforms enhanced by smart meter technology, along with different rate plans that put customers in control of the most cost-effective time to use energy.
Ensuring customers continue to experience safe, dependable energy through investments in infrastructure to bolster reliability and strengthen our system against the impacts of extreme weather events. Examples include minimizing the impact of outages for customers by expanding substations and adding automated switching; improving safety and reliability by replacing more than 1,500 deteriorating poles; and reducing outages while protecting birds and animals by installing 3,000 wildlife guards.
Lessening the Impact of Winter Storm Uri to Keep Energy Affordable
In addition to these key components, Liberty proposes to address the impact of Winter Storm Uri as part of this rate request. The extreme weather in February 2021 resulted in prolonged bitter cold that impacted market and fuel prices, fuel availability, and created record-setting demand for utilities across the Midwest. Like other utilities, some of Liberty’s traditional generating units were impacted by the storm. However, Liberty’s new wind turbines continued to perform successfully during the storm due to their cold-weather design that enables them to operate in temperatures as low as -20 degrees.
Liberty is monitoring potential Missouri legislative initiatives that may allow Liberty to further reduce the impact of this extreme weather event. If this option becomes available to Liberty, the recovery of costs as a result of Winter Storm Uri is expected to be removed in whole or in part from this rate case filing.