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Archive for Thursday, December 15, 2005

Consumer advocate speaks out against Westar rate increase

December 15, 2005

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— A consumer advocate worried Wednesday that state regulators are ready to increase what consumers pay Westar Energy Inc. for electricity while decreasing the risks to the utility's profits.

Westar, the state's largest electric company, has asked the Kansas Corporation Commission to increase its rates by at least $84 million annually. The commission's staff and the Citizens' Utility Ratepayers Board, a state agency representing residential and small-business customers, have advocated cutting the company's rates.

The commission has until Dec. 28 to make a decision, but its three members already have endorsed Westar proposals to allow the company to pass along its fuel costs and the costs of complying with environmental regulations to consumers. In the past, the KCC has set rates that were supposed to cover such items, and the company has had to eat higher-than-anticipated costs.

During an administrative meeting Wednesday, commission members praised Westar's current management for improving the company's financial health after former Chief Executive Officer David Wittig left late in 2002. Wittig was convicted this year in federal court of looting the company while running it.

Niki Christopher, a CURB attorney, said she wasn't pleased with the commission's direction, viewing it as more favorable to the company than to consumers.

"From the ratepayers' point of view, we haven't gotten a lot. As far as we can tell, they've done an awful lot to reduce the company's risk," she said after the meeting.

But KCC members said it's too early to say how their decisions will affect rates. Chairman Brian Moline said it will have to consider how much it has reduced the company's risk, consumers' desires for relatively low rates and created incentives for the company to remain on its current management path.

Jim Haines, who replaced Wittig as Westar's CEO, declined to comment after the meeting because the KCC hasn't yet issued a written ruling on the company's rate proposals.

Westar's proposals would increase rates 9 percent for 352,000 customers in its northern region and about 6 percent for 303,000 customers in its southern region.

In the north, which includes Lawrence, the average residential customer would pay $5.28 more a month, or about $63 annually.

In the south, the average residential customer would pay $4.58 more a month, or about $55 annually.

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