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Archive for Wednesday, June 15, 2005

Westar campaigning for rate increase

June 15, 2005

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As former executives of Westar Energy Inc. face retrial on conspiracy charges this week, a handful of current company leaders are making the rounds in support of a different case: a proposed $84 million rate increase.

The utility needs the money to keep up with rising costs for providing safe, reliable electricity to about 650,000 customers in Kansas, including Lawrence, said James Ludwig, Westar's vice president of public affairs.

The Topeka-based utility filed its rate request earlier this year with state regulators, who are scheduled to rule on the matter by Dec. 28.

Until then, Westar officials will be compiling evidence and answering questions to support assertions that spending another $5.30 a month for power - the proposed average increase for customers in the Lawrence area - would be a good investment.

"We're not interested in generating revenue by giving people inferior service," said Ludwig, who likened electric service to other community services such as roads, hospitals and schools - where quality service is paramount. "Fundamentally, people want those services to be financially secure."

But Westar officials know that they'll face opposition in their quest to boost rates in the utility's northern service area since 2001. Ludwig expects cities, large industrial customers and regulators to argue against the full rate increase.

Niki Christopher will be among them. As lead attorney for the Citizens' Utility Ratepayer Board, it'll be her job to critique the rate request on behalf of consumers, the ratepayers whose bills would be going up.

Christopher acknowledged that the utility had made a number of significant improvements since the dismissal of two top executives. Former chief executive David Wittig and former executive vice president Douglas Lake face charges of conspiracy, falsifying corporate documents, using company planes for personal use and manipulating the utility's policies and board of directions to enrich themselves.

But cleaning up corporate governance and making other changes doesn't necessarily add up to justification for $84 million in revenue from ratepayers, she said.

"We can see a lot of improvement over there," said Christopher, who reviewed previous rate justifications when Wittig and Lake were in charge of the company. "A lot of it has been positive, but we have to keep an eye on things and make sure rates are reasonable.

"They have some interesting ideas about rate design that we're not quite sure about yet."

The Kansas Corporation Commission intends to conduct public hearings about Westar's proposed rate increase later this year.

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