Archive for Thursday, September 6, 2001

Electric rates climb higher

Regulators amend decision, allow KPL charges to increase by 4.4 percent

September 6, 2001

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— State utility regulators Wednesday gave KPL electric customers a jolt in their rates.

An anticipated 3.3 percent increase in electric rates will instead be a 4.4 percent increase, under an order by the Kansas Corporation Commission.

And instead of the new rates being added to bills next spring, the rates are effective immediately and will pop up in this month's bills.

Bottom line: A KPL residential customer using 750 kilowatt hours of electricity will pay an additional $2.25 per month in September and another 54 cents on top of that starting in October, said Kim Gronniger, a spokeswoman for Western Resources Inc., the parent company of KPL and KGE.

Meanwhile, rates for KGE, which serves much of southern Kansas, will go down 6.1 percent.

The revised rate decisions were announced Wednesday as part of the KCC's modification of its July ruling in the rate case of Western Resources, the state's largest provider of electricity.

In its July 25 order, the KCC rejected Western's request for a $151 million rate increase.

Instead, the KCC ordered a $22.7 million decrease, which included a 3.3 percent increase in rates for customers of KPL and a 6.6 percent decrease for customers of KGE. The increase for KPL was attributed to construction of additional power capacity for KPL customers, while the KGE decrease was based upon the KCC's belief that the operating license of Wolf Creek nuclear plant could be further extended.

Western appealed the order, and the KCC made some recalculations, reducing the decrease to $15.6 million with most of the difference to be made up by KPL customers.

The major change made by the KCC was lowering the estimated profits KPL would receive from wholesale energy sales, said Rosemary Foreman, a spokeswoman for the KCC. The KCC also allowed the rates to reflect the increasing price of coal used to fuel power plants.

In its original order, the KCC said the rates would start showing up on bills next spring, after Western had received approval of a plan to distribute the rate changes over different classes of customers, such as residential, commercial and industrial. During that time, the new rates would collect interest.

But Western asked the KCC to allow the company to start charging the new rates now instead of hitting KPL customers with a heavy bill in the spring. The KCC agreed.

"Customers entitled to a decrease will see the decrease immediately, and customers whose rates are increasing will gradually experience that effect over a period of months instead of facing a larger amount due in the spring," said John Wine, chairman of the three-member KCC.

The job of designing rates for the different groups remains to be done. Western must file a proposal by Oct. 19, Gronniger said.

Gronniger declined comment on the KCC's new order and how it would affect a proposed merger between Western and Public Service Co. of New Mexico. In a related action, the KCC delayed until Oct. 5 making a decision on Western's appeal of an earlier KCC action that essentially stopped Western's plan to restructure itself.

Advocates for ratepayers said they had mixed feelings about Wednesday's decision on the KPL rates..

"There was no rate increase that was justified, but we are grateful it wasn't 19 percent," said Jim Zakoura, an attorney representing Kansas Industrial Customers.

"I'm somewhat disappointed in the KPL numbers," said Walker Hendrix, consumer counsel for CURB, a state agency that represents ratepayers.

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