Archive for Wednesday, April 25, 2001

Western calls KCC staff figures flawed

Electric utility responds to recommendation that its rates be cut

April 25, 2001


— The state's largest electric utility says state regulators used flawed accounting methods when recommending a rate decrease.

Western Resources Inc., seeking a $151 million rate increase, filed its response Tuesday to the proposal by the Kansas Corporation Commission's staff that its rates instead be cut by $91.7 million.

James A. Martin, a Western senior vice president, said the recommendations included "adjustments which are unfounded in regulatory precedent both in Kansas and the United States" and "are inconsistent with long-accepted principles of accounting and depreciation."

KCC spokeswoman Rosemary Foreman said the commission's staff used traditional and industry-accepted accounting standards to arrive at its recommendations.

"In any rate case, how someone arrived at their numbers can be an issue," Foreman said Tuesday.

Western Resources' KPL unit serves about 345,000 customers in central and northeast Kansas, while its KGE subsidiary serves about 290,000 customers in Wichita and southeast Kansas.

The company wants to increase KGE's rates $58 million, or about 10 percent, and KPL's rates by $93 million, or about 19.5 percent.

Western says the increases are needed to cover the costs of building generating facilities and of rising natural gas prices.

But Foreman said KCC staff calculated both of those items into its recommendation that KGE's rates be cut $92 million, or about 13.5 percent, and that KPL's rates rise by only $262,000 or about 0.02 percent.

A final public hearing on the proposed rate increase is scheduled for Thursday in Pittsburg. The KCC plans a technical hearing, similar to a court proceeding, on May 17.

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