Topeka More than 650,000 customers of Westar Energy Inc. are supposed to learn today whether their electric rates will increase, though their power bills already are likely to fluctuate more than in the past.
Westar, the state's largest electric utility, has asked the Kansas Corporation Commission to increase its annual rates by $84 million and to grant permission to pass its fuel and environmental costs directly on to consumers. State law gives the three-member commission until today to issue a decision.
Commissioners haven't disclosed how much profit they'll allow Westar to earn as a regulated monopoly. But its members have publicly endorsed Westar's proposals on fuel and environmental costs.
Earlier this month, an attorney for the Citizens' Utility Ratepayers Board expressed concern that the commission was headed toward increasing Westar's rates. Both the commission's staff and CURB, which represents residential and small-business customers, recommended a cut in Westar's rates.
"We're still concerned about it," CURB attorney Niki Christopher said Tuesday, adding that the agency wants to encourage Westar to keep operating as it has since former Chief Executive Officer David Wittig left in December 2002.
Westar's decision will be posted at www.ljworld.com soon after it is announced today.
After Wittig resigned, Westar abandoned a strategy adopted in the mid-1990s of diversifying its businesses. Under KCC pressure, the company sold almost all its nonutility assets and cut its debt from $3.6 billion to $1.7 billion.
Earlier this year, a federal jury convicted Wittig of looting Westar while serving as its top executive.
Westar officials have said they need additional revenue to cover rising costs of doing business and to maintain customer service programs. They've declined to speculate on how the commission might rule.
"It would inappropriate to discuss the order until we actually have it," company spokeswoman Karla Olsen said.
A key issue for the KCC is the profit Westar should be allowed to earn. The company has argued that an 11.35 percent profit is reasonable; CURB's figure is 8.75 percent.
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, the average residential customer would pay $5.28 more a month, or about $63 annually. The region includes Lawrence, Atchison, Emporia, Leavenworth, Manhattan, Olathe, Salina, Topeka, Hutchinson and Parsons.
The south includes Arkansas City, El Dorado, Fort Scott, Independence, Newton, Pittsburg and Wichita. There, the average residential customer would pay $4.58 more a month, or about $55 annually.
Allowing Westar to pass fuel and environmental costs on to customers would be a significant change in how the company is regulated. Previously, the KCC has set overall rates, and Westar has had to absorb unanticipated costs.
Critics contend Westar is shifting its risk to consumers. Westar has said customers' bills shouldn't fluctuate significantly, but consumer advocates worry they'll be as volatile as natural gas bills.
"I think you'll see that volatility come into play more in the summer," CURB's Christopher said.
In trading Tuesday on the New York Stock Exchange, shares of Westar closed up 7 cents, at $22.22. Westar shares have traded in a 52-week range of $21.07 to $24.97.