News Release

December 12, 2005

KCC approves $2.15 million increase for Empire Electric

The Kansas Corporation Commission (KCC) has issued an order approving a stipulated settlement agreement granting Empire District Electric Company (Empire) a $2.15 million electric rate increase, which equates to an overall increase of approximately 14 percent. The settlement agreement was reached and agreed to by KCC Staff and Empire.

The agreement also provides for the implementation of an Energy Cost Adjustment (ECA) charge. Fuel costs incurred by the company for the generation of electricity will be passed on to customers through the ECA charge. The ECA charge will be reflected as a separate line item on the customer bill and will fluctuate on a monthly basis. Historically, fuel costs were included in the fixed charge per Kwh (kilowatt hour) of energy used. The new rates will be effective for usage on and after January 1, 2006.

On April 29, 2005, Empire filed an application requesting an electric rate increase of approximately $4.2 million. In its application, the company said the increase was necessary due to investments in the electric system used to serve Kansans, and increases in operating costs and the cost of fuel. The company further stated to protect its financial integrity and attract capital, a competitive return is necessary to continue providing safe, reliable and efficient service. The company's last rate increase was granted June 27, 2002 for approximately $2.5 million.

Empire, based in Joplin, Missouri, provides electric service to approximately 157,000 customers in the four-corner area of Kansas, Missouri, Oklahoma, and Arkansas. Empire serves approximately 10,335 retail customers in the extreme southeast corner of Kansas.

Docket No. 05-EPDE-980-RTS