Topeka ? The cost of country club meals and fitness club memberships are among some of the expenses that Westar Energy Inc. is seeking to recover in its request for an $84 million rate increase.

Jim Ludwig, vice president for public affairs for Westar, said the state’s largest electric utility should be compensated for those expenses because they are part of the cost of doing business.

But consumer advocates and staff members of the Kansas Corporation Commission challenge that proposal, saying those costs have little to do with benefiting ratepayers.

“You have enough of those smaller adjustments and they add up,” said Susan Cunningham, general counsel for the KCC.

Westar’s $84 million request would increase rates 9 percent for 352,000 customers in its northern region, which includes Lawrence, and about 6 percent for 303,000 customers in its southern region. Westar also wants consumers to pay for rising costs for fuel, transmission and complying with environmental regulations.

The three-member KCC has until Dec. 28 to issue a decision, although it is expected to rule earlier.

In the mountain of testimony filed in the case, the Citizens’ Utility Ratepayer Board objected to allowing Westar to recover $9,390 for membership costs at the Topeka Country Club and $8,150 in fitness club memberships through rates charged to customers.

Ludwig, with Westar, said the company wasn’t seeking recovery of membership dues at the country club, but rather expenses the utility incurred there when having business meetings with customers. Westar is seeking recovery through rates of the fitness club memberships, he said.

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“That’s a reasonable thing,” Ludwig said. He said meals at the country club were incurred while conducting business, and the fitness dues may in the long run lead to reduced health care costs for the company.

Cunningham disagreed.

“We feel like those types of activities benefit the company but not necessarily all of its ratepayers,” she said.

There are other disagreements: Westar is claiming $3.47 million in expenses for pursuing the rate case. CURB’s expert witness Andrea Crane called that amount “astronomical” and said the figure should be reduced to $2.5 million. The KCC staff, however, didn’t disagree with Westar on that point.

Westar is claiming $232,014 for legal expenses relating to an investigation by the Federal Energy and Regulatory Commission, according to CURB. Crane and Cunningham argued ratepayers shouldn’t have to pay for those expenses.

Westar has put in for additional costs to comply with the federal Sarbanes-Oxley Act, which requires greater corporate disclosure of accounting practices. Again, opponents of Westar’s rate increase say the additional costs are one-time expenses that shouldn’t be built into the rate base.

The utility also is claiming as part of its rate request $514,250 in dues to the Edison Electric Institute, according to CURB.

Crane said 25 percent of those dues should be disallowed because that amount is dedicated toward legislative advocacy or lobbying.

“Regulatory agencies generally disallow costs involved with lobbying, since most of these efforts are directed toward promoting the interests of the utilities’ shareholders rather than their ratepayers,” she said.

Small items?

The meals at the country club and such items are small potatoes when compared with the overall $84 million rate request.

Still, Cunningham said, “It is worth our due diligence to look into these costs. We feel like it is our job to make sure that the company is allowed to recover the just and reasonable cost of providing service.”

The KCC staff has recommended an $11.1 million increase in the north territory but a $41.5 million decrease in the south, for an overall reduction for Westar.

CURB recommended a $5.9 million decrease in the north and a $42.1 million decrease in the south.

Under Westar’s proposal, the average residential customer in the north would pay $5.28 more a month. The region includes Lawrence, Atchison, Emporia, Leavenworth, Manhattan, Olathe, Salina, Topeka, Hutchinson and Parsons.

Westar’s southern region includes Arkansas City, El Dorado, Fort Scott, Independence, Newton, Pittsburg and Wichita. The average residential customer there would pay $4.58 more a month.