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Archive for Wednesday, October 10, 1990

UTILITY FINDS OPPOSITION FOR INCREASE IN GAS RATES

October 10, 1990

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The Kansas Corporation Commission staff is recommending that a natural gas rate increase requested by Kansas Public Service be cut in half.

The staff of the KCC, the agency that regulates utilities in the state, said KPS, the Lawrence natural gas utility, should be allowed an increase of $881,942, not the $1.6 million the company sought in a filing in May. That would be a 6.2 percent rate increase.

If the gas company's proposal were approved unchanged, it would mean an increase of 11.1 percent.

The staff made its recommendations in written testimony filed Tuesday, the same day the Citizens' Utility Ratepayers Board, a utility ratepayers watchdog group, filed testimony opposed to granting the full increase that KPS sought.

The KCC staff and CURB also object to a KPS plan to increase existing customer charges and establish new ones.

KPS PROVIDES natural gas service to about 22,600 customers in Lawrence and the surrounding area.

Bill Salome, KPS president, today defended the utility's request for the increase.

"We feel like the $1.6 million that we requested were solid figures," Salome said. He added that because the hearings were still in process, he had not calculated what the proposed increase would mean to monthly gas bills.

He said those amounts are expected to be revealed during KCC hearings Oct. 24 and Oct. 25 in Topeka.

The KCC will conduct a public hearing on the KPS request at 2 p.m. Oct. 18 in the commission room of city hall, Sixth and Massachusetts. Ratepayers also may call or write the KCC in Topeka with their comments. The KCC's number is 271-3100.

Salome said this morning that the utility now has 10 days to rebut the staff's recommendation.

Bill Riggins, consumer counsel and CURB's attorney in the case, said CURB was recommending the KPS request be cut by at least $424,000, or about 27 percent. CURB is a state agency that represents the interests of residential and small business ratepayers in public utility matters.

RIGGINS SAID CURB discovered 14 areas in which KPS overstated its need for additional revenue.

"The company's request clearly is excessive," Riggins said. "However, CURB also is very concerned about the way in which KPS wants to implement the increase."

KPS has asked permission to increase the monthly service charge for residential customers from $3.95 to $8; it wants to increase the charge for small-business customers from $3.95 to $30. KPS also proposed significant increases in collection and reconnection charges, and it wants to implement new charges for initiating service and for temporarily disconnecting service.

The KCC staff recommends that the residential customer's monthly service charge increase from $3.95 to $5, a 26.58 percent increase, not the 102 percent increase the company sought.

THE STAFF also is recommending a smaller increase in the cost customers will pay for natural gas. Currently, a residential customer who uses 7,500 cubic feet of gas per month pays $33.02, including the service charge. Under the company's proposal, residential customers would pay $37.53 for the same amount of gas, an increase of 13.6 percent.

The staff recommendation would set the cost at $36.56, or an increase of 10.73 percent. The staff proposal would be approximately $5 per year less once certain rebates were passed on to residential customers.

Overall, staff made more than 40 technical adjustments to the company's rate request.

Riggins said CURB was opposing any increases in existing customer charges and was opposing any new customer charges.

"Increases of this magnitude in monthly customer service charges are unprecedented," he said.

Riggins said large customer service charges were detrimental to consumers. "They discourage conservation, they reduce the customer's ability to control his or her bill, and they unfairly burden customers who do not use much gas," he said.

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