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Archive for Wednesday, October 5, 2005

Westar: Rate proposals damaging

Utility would ‘struggle’ under customer groups’ options, CEO says

October 5, 2005

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— Westar Energy officials said recommendations from customer groups to decrease electric rates would force the state's largest utility to "struggle for mere survival."

Westar Energy is seeking rate increases that would generate an additional $84.1 million.

A final public hearing on the rate increase is scheduled for 7 p.m. Thursday in Wichita.

Hearings that include parties in the rate case before the Kansas Corporation Commission start Oct. 17.

The KCC is required to make a decision in the case by Dec. 28.

Westar has divided its rate increase request into two service areas - the northern area, which includes Lawrence, and the southern area, which includes Wichita.

Westar wants a $47.8 million increase in the north and a $36.3 million increase in the south. If approved, Westar's rate increase would cost residential customers in Lawrence about another $5.30 a month.

But various parties in the rate case have urged the KCC to decrease certain rates.

For example, the Citizens' Utility Ratepayer Board, which represents residential and small customers, recommended a $5.9 million decrease in the north and a $42.1 million decrease in the south.

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

Customer power

The Kansas Corporation Commission is accepting written comments through Oct. 16 regarding Westar Energy's application to increase electric rates in Kansas, including Lawrence.

Comments should reference Docket No. 05-WSEE-981-RTS and be sent to the Kansas Corporation Commission, Office of Public Affairs and Consumer Protection, 1500 S.W. Arrowhead Road, Topeka, KS 66604-4027.

Comments also may be submitted by e-mail to public.affairs@kcc.state.ks.us, through the Commission's Web site, www.kcc.state.ks.us, or by calling (800) 662-0027.

And, the Kansas Industrial Customers Group recommended a $2.1 million increase in the north and a $43.8 million decrease in the south.

Consumer groups say Westar's increase request would give the company's shareholders too great a profit at the expense of ratepayers. And they oppose a proposal by Westar to pass through to customers the costs of fuel and purchased power.

But in written testimony filed late Monday with the KCC, James Haines, president and chief executive officer of the Topeka-based utility, said the proposals recommended by the opposing parties would devastate Westar.

"The commission's own staff, as well as others, have made recommendations in this case that, if adopted, would force Westar into a struggle for mere survival," Haines said.

He said Westar has worked hard to recover from financial problems during the past two and a half years, and needs the rate increases to plan for the long-term energy needs of Kansans.

He said some of the recommended decreases stemmed from earlier problems at the company.

Former Westar chief David Wittig resigned in late 2002 after he was indicted on charges of fraud related to a bank loan. He later also was indicted on charges of looting the company. He has been convicted in both cases.

"To use past failures of others as a justification to debase current successes of incumbents would be arbitrary, even punitive," Haines said.

The KCC is accepting written comments from the public in the rate case through Oct. 16.

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