Topeka Westar Energy Inc.'s proposal to produce nearly 300 megawatts of wind power is "prudent," state utility regulators said Thursday.
But the Kansas Corporation Commission rejected an additional 1 percent bonus that was requested by Westar.
Westar, the state's largest electric utility company, had no immediate comment. Officials said they needed more time to study the 44-page order.
"We are taking a look at the order and discussing some of the nuances of it," said Westar spokeswoman Gina Penzig.
David Springe, consumer counsel for the Citizens' Utility Ratepayer Board, said although he disagreed with parts of the decision, he was pleased with the overall ruling.
"The commission didn't give them the sugar. It's a fair and balanced decision," Springe said.
The KCC ruling was highly anticipated because it was seen by many as providing a roadmap for future wind development in Kansas, and it dealt with the largest wind plan that had been made in the state.
Westar had sought pre-approval to increase rates on the average customer by $2.25 per month. The company said it needed the increase to produce 300 megawatts of wind power at a projected cost of $830 million over 20 years.
Included in its proposal, Westar wanted to get an additional 1 percent increase in profits as a bonus for taking the risk to develop more wind power.
Without the 1 percent bump in the rate of return, the average customer increase would be less than the $2.25 per month, but nobody involved in the rate case knew what that figure would be.
CURB, which represents consumers, said while it agreed with the need for more wind power in Kansas, it said Westar could develop it in a less expensive manner.
CURB said it would be cheaper for Westar to purchase wind power from private wind farms, instead of building its own wind farms. Westar had proposed buying half of the power and generating the other half with its own wind farms.
CURB also said Westar shouldn't be entitled to the extra 1 percent rate of return.
But the KCC said the cost of buying power and the cost of constructing wind farms would be allowed in future rate cases.
On the issue of increasing Westar's rate of return by 1 percent, the KCC said that it wouldn't be fair to ratepayers in light of some of the risks inherent in wind energy.
Earlier, the rate case had generated controversy after CURB found an internal Westar memo that said Gov. Kathleen Sebelius had told utility executives that their companies would be "fully compensated" when seeking to recover costs for building more wind energy.
Because Sebelius had appointed all three members of the KCC, CURB asked that the members disqualify themselves from the rate case or state that they had no conversations with Sebelius on the subject of setting rates. All three members vowed they didn't have such a conversation. One commissioner did disqualify himself from the case, but the other two refused to do so.