Topeka ? The state’s major universities warned Kansas Board of Regents officials Thursday that high energy costs were cutting into their budgets.

“It’s a major issue for KU and for every other institution and for every state agency,” Kansas University Chancellor Robert Hemenway said. “We’re just in the middle of a spiraling cost situation and no one really knows where it will end.”

Tom Rawson, vice president of administration and finance at Kansas State University, said costs for natural gas and electricity were going to be at least $2 million more than projected this year.

K-State will start assessing a surcharge on credit hours to pay for part of the escalating costs, he said.

“Consumption is down, but the rates are driving us crazy,” he said.

KU officials said they expected about a $2 million shortfall in the utility budget this year.

Energy conservation at KU has reduced natural gas consumption at the Lawrence campus by 5.3 percent from October 2005 through February 2006, but electrical use increased more than 5 percent, officials said.