Westar industrial clients seek rate reduction

? Some of Westar Energy’s industrial customers claim they are paying excessive electric rates and have requested an $80 million rate reduction.

The chief counsel for residential customers, however, fears a rate reduction could force the company into bankruptcy.

A lawyer for the industrial customers outlined the case for lower rates Monday in comments filed with the Kansas Corporation Commission. The filing, in response to the commission’s Nov. 8 order to reorganize the company, asks the commission to immediately begin a rate investigation.

“We strongly believe the rates we’re paying are excessive,” said Jim Zakoura, lawyer for the industrial customers.

Westar said in its response that it would comply with the order to reorganize but needed more time. The company did not address the rate issue.

The request for a rate reduction follows a weekend in which Westar’s board of directors accepted the resignation of embattled chief executive David Wittig and replaced him with James Haines, the former chief operating officer who left in 1996.

Wittig has pleaded innocent to federal bank fraud charges related to personal financial dealings.

Haines said his top priority was to reduce the company’s $3.6 billion debt. Westar serves 647,000 Kansas customers, including Lawrence residents.

Zakoura said the company’s reduced equity, as a result of the debt load, justified reducing rates by $36 million.

The company also has reduced its work force by about 600 since rates were set, justifying a $45 million rate cut, he said.

The chief counsel for the Citizens’ Utility Ratepayer Board, however, said bankruptcy would leave ratepayers with little say because a court would oversee reorganization of the company.

“Normally, we’re for every rate reduction we can get; it’s just that the company is so financially strapped,” Walker Hendrix said.

“Having a utility go into bankruptcy is not something that we would prefer,” he said.

Hendrix had requested that the commission order a management audit of Westar. Now, however, he expects the commission to give Haines time to deal with the financial problems.