Lawrence residents and large businesses soon will be paying more for their natural gas, part of a new $2.7 million rate settlement approved Monday by state regulators.

And more energy increases could be on the way. Also Monday, Westar Energy asked the Kansas Corporation Commission for permission to boost electric rates in Lawrence and other communities by 9 percent.

The news was enough to make many consumers and business leaders squirm, with gasoline costs already having sped past $2 a gallon and little hope for relief on the way.

All Jeanne Waisner could do was take the half-full approach. At least her business won’t get hammered by Aquila Inc.’s new natural gas rates that will rise by 18 percent for industrial customers and take effect June 1.

“We don’t buy from Aquila, so their rate increase won’t impact us,” said Waisner, who pays the bills at Astaris LLC, the phosphates plant north of town that looks to spend $4.8 million this year for enough natural gas to heat 10,000 homes.

Even so, she’s still left wondering where the plant would come up with the additional $9,000 a month that would be needed to cover Westar’s proposed electric rates.

The new rates would generate an additional $47.8 million in revenues from 352,000 ratepayers in Lawrence, Topeka, Leavenworth, Olathe, Atchison and other towns and rural areas in the northern part of Kansas; Westar customers in southern Kansas would pay 6 percent more.

“It’s just a tremendous cost of doing business,” Waisner said. “It impacts the decisions we make and how we operate.”

The increases in electric rates would apply across the board to all customers, said Karla Olsen, a Westar spokeswoman.

The typical residential bill for customers in Lawrence and other northern areas would increase by $5.28 a month, Olsen said, up from the current average of nearly $50. Customers in Wichita and other southern areas would pay another $4.58 a month.

Aquila Inc. customers will soon be paying more for their natural gas, and Lawrence area residents may also soon face higher electric rates from Westar Energy. That could mean big cost increases for stores such as SuperTarget, 3201, where Matt Foerschler perused televisions Monday.

Rising cost of business

At SuperTarget in Lawrence, 3201 Iowa, Nate Robinson didn’t bother trying to compute the increased costs the proposed Westar increases would bring. The store’s lamps, TVs and other floor items are on 97 hours a week.

“In our case, we have to open and run every day,” said Robinson, a team leader at the store. “It’s something we don’t think about. It’s the cost of doing business.”

Amarr Garage Doors spends about $20,000 a month on electricity for its manufacturing plant in the East Hills Business Park.

“We just spent $9 million on the building (an expansion) and $9 million for new equipment,” said Kristen Krug, who handles human resources. “That’s a lot of money. These (energy) increases just mean you have to find ways to reduce costs in other areas. You certainly don’t want to pass along everything to the customer.”

Critics attacked Westar’s plan as a move to shift the utility’s financial risks to consumers.

Critics pan risk shift

Westar wants to pass along its changing fuel and transmission costs, as well as expenses from modifying generating plants to meet federal air pollution standards. Previously, regulators set electric rates, and rising costs were shouldered by Westar until another rate review.

Westar, the state’s largest electric utility, also is seeking an 11.5 percent profit for its investors.

“Interestingly, Westar hasn’t proposed lower profit levels because they’re less risky,” said David Springe, chief attorney for the Citizens’ Utility Ratepayers Board, which represents residential and small-business customers. “They want us to take the risk.”

Westar filed its proposals with the Kansas Corporation Commission, which has until Dec. 28 to rule on them.

Aquila’s natural gas price increases, meanwhile, take effect June 1. The Kansas City, Mo.-based utility originally had sought to recover $6.2 million in rate increases but settled for $2.7 million with state regulators.

The natural gas rates actually would give a break to small businesses, said George Minter, an Aquila spokesman. Beginning June 1, the average bill for a small business will be $133.23, a savings of $1.73, or 1.3 percent.

Aquila doesn’t track numbers for “typical” industrial uses, but the delivery charge is slated to increase 18 percent. Residential customers will pay more, Minter said. The average bill of $59.50 will rise by $2.30 a month.

Waisner is pleased to be insulated from the increases, both at work and at home. She uses propane for heat at her rural residence, and she filled her tank in August for less than $1 a gallon.

That was before the price spiked recently to $1.30.

“We’re pretty lucky,” she said.