Higher gas, electric bills expected this winter

? Many Kansans could face a double dose of bad news about energy prices this winter.

The state’s largest electric utility, Westar Energy Inc., is asking regulators to increase its annual rates by at least $84 million. The Kansas Corporation Commission is scheduled to begin hearings Monday, with a decision due Dec. 28.

And the possibility of higher electric rates comes as state officials and social service agencies are warning consumers they can expect home heating costs to be higher this winter than last winter.

With natural gas costs high, one consumer advocate is counseling people to keep their thermostats at 60 degrees all winter, and social service agencies are urging Kansans who can spare even a little money to help support programs that help families struggling with their bills.

“It doesn’t take much to make a real difference,” said Deborah Abner, director of fuel assistance programs for the Salvation Army’s Kansas and western Missouri division. “Cold weather is just going to add to the stress level and hardship of many families throughout the state.”

Kansas officials already were worrying about rising natural gas costs when Hurricanes Katrina and Rita hit the Gulf Coast and shut down production.

On the New York Mercantile Exchange, prices have risen above $13 per mcf (thousand cubic feet) for natural gas to be delivered from December through March. The actual price consumers pay is likely to be lower because utilities lock in lower prices earlier.

But last year, the same gas futures were trading between $8 and $9 per mcf – prices already considered high.

Higher gas prices represent stress not only for poor families but also for elderly Kansans living on fixed retirement incomes.

“We don’t want to see people sacrifice essential medications in order to keep the heat on,” said Karen Hauser, director of Kansas Catholic Charities for the church’s Salina diocese. “I don’t like to see people having to make those kinds of choices.”

Typically, according to the KCC, a residential customer uses 120 mcf of gas a year – but about two-thirds of it during the winter. Thus, homes often burn 20 mcf during a single winter month.

“Consumers are going to see prices on their gas bills that are far higher than we’ve ever had in the state,” said David Springe, the chief attorney for the Citizens’ Utility Ratepayers Board, which represents residential and small-business customers.

Springe said conservation represents the only way for consumers to cut their gas bills. That includes checking furnaces, caulking windows – and turning down the thermostat.

“And I mean way down,” Springe said. “You are not going to freeze in your home this winter if you set your thermostat down to 60 degrees or 62 degrees.”

But Hauser said: “You cannot necessarily turn down the heat for someone who is sick or children who may be susceptible to viruses.”

Contributions to the Salvation Army programs for Kansas and western Missouri are collected by Kansas Gas Service and another utility, Aquila Inc., then distributed on a first-come, first-served basis to families meeting eligibility requirements.

The state also has a Cold Weather Rule that prevents companies from shutting off service in freezing weather from Nov. 1 through March 30. But KCC Spokeswoman Rosemary Foreman said consumers can emerge from the winter months with huge outstanding bills.

“It’s when we move into spring and April – that’s when it’s going to get real scary,” she said. “Those debts will potentially carry over into the next winter.”

Also, when spring arrives, Westar’s 655,000 customers could face higher electric rates.

Two years ago, as part of a restructuring of the then debt-ridden utility, the KCC said it would review Westar’s rates this year and ordered it to file a proposal. The company contends it needs more revenue to cover rising costs.

Westar also wants to pass on to consumers changing fuel and transmission costs and expenses from modifying generating plants to meet federal air pollution standards. Since the 1990s, rising costs have been shouldered by Westar until the KCC reviews rates.

Spokeswoman Karla Olsen said the extra revenue will allow Westar to continue services such as expanded tree trimming and telling consumers who have lost power when it should be restored.

“The cost of doing business and providing electric service has gone up,” Olsen said. “We don’t want to be just bare bones. We want to make sure that we keep these customer programs in place.”

In Westar’s northern region, 352,000 customers would see an increase of about 9 percent, and the average residential customer would pay $5.28 more a month, or about $63 annually. The region includes Atchison, Emporia, Lawrence, Leavenworth, Manhattan, Olathe, Salina, Topeka, Hutchinson and Parsons.

In Westar’s southern region, rates would rise about 6 percent, with the average residential customer paying $4.58 more a month, or about $55 annually. The region includes Arkansas City, El Dorado, Fort Scott, Independence, Newton, Pittsburg and Wichita and has about 303,000 customers.

Both the KCC’s staff and the ratepayers’ board are challenging Westar’s proposal and seeking an overall decrease in Westar rates. Springe noted that under Westar’s proposal, it would still earn an 11.5 percent profit for investors – compared with the 8.75 percent the ratepayers’ board recommends.

The KCC is most likely to modify Westar’s proposal, but one or both regions still could see higher rates.

And, Foreman acknowledged, with natural gas prices high, “Any increase is going to be difficult for consumers.”