Kansas Public Service on Friday filed a request with the Kansas Corporation Commission to increase its natural gas rates for the first time in five years.
Citing the need to help offset costs of gas line replacements and a new customer billing and information system, the Lawrence-based utility filed for a $1.59 million increase in annual gas revenues. This is an overall increase of 11.1 percent and would raise the monthly bill of a residential customer using 10,000 cubic feet of gas described by company officials as typical by about $4.48.
Mike Hertling, vice president of administration for KPS, said the utility hasn't requested an increase in its base rates since 1985.
SINCE 1985, the company has invested more than $4.6 million in its distribution system. This rate of investment in facilities is expected to remain high in the next five years as the company replaces unprotected bare steel and cast iron sections of pipeline.
"At this point, we just can't absorb any more of the cost without raising the rates," Hertling said.
In addition to the cost increases associated with pipeline replacement, the company also has revamped its customer information and billing system. The new system, which took effect last November, was prompted by new directives issued by the KCC.
Hertling said KPS is seeking an increase in its base rates, which reflect the company's cost of doing business. The rate charged to customers also includes the cost of natural gas, which he said is based on the price they're charged by their suppliers.
EVEN WITH this proposed increase, the company's overall rate levels would be about the same as those charged during the winter heating season of 1982-83, according to KPS officials.
Company officials said they don't expect a KCC hearing on the filing until this fall. The corporation commission is required by law to issue a decision within 240 days of the filing date.
KPS is a division of UtiliCorp United Inc., a Kansas City, Mo.-based corporation that provides electricity and natural gas service in eight states through six divisions. UtiliCorp also owns a Canadian utility subsidiary in British Columbia and two non-regulated subsidiaries specializing in energy and utility-related enterprises.