Topeka — Natural gas companies want to charge their good customers you may be among them for the bills they couldn't collect from bad customers last winter when heating costs reached record levels.
Under legislation unveiled Thursday, the companies would be allowed to bypass state regulators and pass through the millions of dollars of bad debts to all customers.
"It is a reasonable attempt to allow utilities to recover legitimate costs incurred in providing safe and reliable service," said Larry Headley, director of regulatory affairs for UtiliCorp United Inc., which does business in Lawrence as Kansas Public Service Co.
But consumer watchdogs oppose the proposal.
Walker Hendrix, head of the Citizens Utility Ratepayers Board, said the measure would allow utilities to pass through the cost of their bad debt without considering other offsetting factors, such as the extra money the companies made from last year's high cost of natural gas and the extra money from high usage caused by lower-than-normal temperatures.
The measure House Bill 2644 was discussed before the House Utilities Committee. The committee took no action on it, but Chairman Carl Holmes, R-Liberal, said the bill probably would be given serious consideration during the legislative session.
Utility company officials said unpaid bills and their losses associated with them skyrocketed last year because of high natural gas prices and the cold winter. The cold winter also cut into utilities' ability to collect debts, the officials said, because state regulators extended a moratorium on gas disconnections.
The ability of utilities to pass through the cost of unpaid bills currently is figured into the companies' rates set by the Kansas Corporation Commission.
Because the rate increases occur about once every five years, utility officials argued that allowing an automatic pass-through would be more efficient. They also said the debt from last winter far exceeded what they were allowed to recover under their rate structure.
The legislation "would eliminate the need for filing a rate case to recover costs from exceptionally high levels of uncollectible customer accounts," said James Bartling, manager of public affairs for Greeley Gas Co.
The amount of uncollected bills runs into the millions of dollars.
UtiliCorp United reported uncollectible bills of $1.8 million, or more than three times the amount it could recover under its current rate structure. Greeley Gas reported uncollectible bills of $1.8 million, too, which was more than four times what it is allowed to recover. In a filing with the KCC, Kansas Gas Service Co. also reported uncollected gas costs of several million dollars.
But Hendrix said that if a utility could automatically pass through the cost of unpaid bills, it would make no effort to collect those bills.
The legislation also would bypass a decision made last week by the KCC, he said.
The KCC rejected a proposal by the utilities to collect the increase in the bad debts, but it ruled that the companies could keep a tally of the unpaid bills and that the KCC would consider those figures when the utilities applied for future rate increases.
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