Missouri Public Service Commission Approves UtiliCorp Settlement to Lower Electric Rates for Missouri Public Service Customers.

Business Editors

KANSAS CITY, Mo.--(BUSINESS WIRE)--Feb. 21, 2002

The Missouri Public Service Commission today approved a rate case settlement with UtiliCorp United (NYSE: UCU) that lowers the electric rates of the company's Missouri Public Service division by 1.4 percent annually. This represents a $4.25 million annual revenue reduction for Missouri Public Service.

"We believe the settlement is fair for both Missouri Public Service ratepayers and the company," said Judy Ness, community relations director for Missouri Public Service. "The prices of fossil fuels that are used to generate electricity have dropped dramatically since the time we filed our rate case in 2001. The effect of lower-than-forecasted natural gas and coal prices will result in lower costs for Missouri Public Service customers. This is the main factor in eliminating the need for our originally requested rate increase."

At the same time, UtiliCorp expects that the rate decrease will have no effect on the company's 2002 earnings forecast.

In June of 2001, UtiliCorp had filed a 16.9 percent rate increase request with the Commission on behalf of Missouri Public Service. This would have equated to a $49 million increase in revenues for Missouri Public Service.

Under the settlement, a Missouri Public Service residential customer using 1,000 kilowatt-hours of electricity a month will experience a decrease of about 75 cents a month, or $9 annually. The new rates will be effective in mid-March.

"This rate case settlement is completely separate from Missouri Public Service's costs incurred during the recent ice storm that affected customers in 15 counties of our service territory," said Ness. "We have not yet determined whether we will make a separate filing with the Commission to recover those storm-related costs."

Since 1983, Missouri Public Service has recorded two increases in its electric rates, the most recent one in 1993, and four decreases. Currently, its rates are 7.26 percent lower than they were in 1983, according to Ness. In addition, since 1983 the company has invested approximately $500 million to improve and maintain its electric operations.

Missouri Public Service provides electricity to 205,000 customers in Missouri.

Based in Kansas City, Mo., UtiliCorp United is a multinational energy company with more than 4 million customers. It operates in the United States, Canada, the United Kingdom, Spain, Germany, Norway, New Zealand and Australia.