Westar to continue with wind energy investment
Westar Energy plans to go ahead with investments in three wind farms even though its officials don't like an order issued by state regulators. Enlarge video
Topeka — Westar Energy on Friday announced it was suspending plans for 200 megawatts of wind power because of the Kansas Corporation Commission's ruling on its wind proposal.
"We are concerned that the KCC decision introduces uncertainty as to how wind investments might be regulated in the future, increasing their risk and inhibiting such development," said Bill Moore, Westar's president and chief executive officer.
On Thursday, the KCC said Westar's wind plan was "prudent" but declined to approve Westar's request for a 1 percentage point increase in its rate of return as an incentive. The commission said the uncertainties of investing in wind power shouldn't be passed on to the ratepayers.
Westar, the largest utility in Kansas, said it would proceed with its immediate plan to produce nearly 300 megawatts of wind power.
But because of "regulatory uncertainty" it will suspend plans for an additional 200 megawatts by 2010.
Moore said the KCC order also opened the door for possibly tougher standards and financial penalties than has been imposed on other forms of power.
"We don't see the order encouraging the further development of wind energy in Kansas," Moore said.
Under Westar's plan to produce 300 megawatts, about half would be purchased from other power producers and the other half would be generated by Westar-built wind farms.
The KCC said the actual cost to construct wind farms would be allowed in Westar's rates. Any cost in excess would be subject to further review, it said.
The KCC also said Westar would be allowed to recover the costs of purchasing wind power. It also said it would review Westar's operations of its wind assets and make financial adjustments if the company had not maintained its wind facilities appropriately.
The Citizens' Utility Ratepayer Board, which represents consumers, wanted the KCC to approve only Westar's purchase of wind power, saying that building wind farms exposed ratepayers to too much risk. But CURB said that overall, the KCC decision was fair.
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just_another_bozo_on_this_bus (anonymous) says…
No, this is merely a form of attempted extortion on the part of Westar. They know that development of wind power is inevitable and urgent, largely because of foot-dragging by vested corporate interests (such as Westar) which control our energy policy. Dependence on fossil fuels for our energy are like a gun to our heads, and companies like Westar have their fingers on the trigger. If you don't want them to pull it (which requires major investments in wind power, etc.) then they want to get a windfall (pun intended) in rate increases.
merrill (anonymous) says…
Who ever said energy would be free? Government intervention is what Wall Street and fossil fuel industry consume daily. The more the better in their books. Nuke Power consumes tax dollars like nobody's business and coal is not doing too bad. These guys play this game cuz the special interests always win out. Cutting the pay of the Westar CEO to $300k a year and applying the remaining millions annually to wind and solar power would be a far better payback for stockholders.
meanwhile:
http://www.thenation.com/doc/20070507...
none2 (anonymous) says…
Westar is hardly an example of anything good in a corporation. Have people already forgotten just how much this company screwed up in the recent past? Have people forgotten how they spent rate payers money, to diversify out of the utility business, and then they wanted to leave the utility business and keep everything else that they made off the backs of rate payers? Definitely, I feel the love, and feel SO sorry for them.
Quite frankly, they are like the criminal behind bars finding religion, and now is asking to get off the hook plus get some charity because they plan on doing so much good now. Westar couldn't care less about alternative energy, they were more interested in finding an excuse for another rate hike.
If they needed the money in order to pay the up-front costs of building a wind farm, they could have issued bonds. Or for a better novelty, they could have said give us the rate hike, and they will make the rate payers shareholders in what they build... Other utility corporations have build wind farms, Westar simply wanted more money from Kansans and thought this green PR stunt would get them what they wanted.
JackRipper (anonymous) says…
Here, here none2! One has to wonder about the health of our corporations in general if a publicly regulated industry was so brazen to have someone like Wittag playing his games. What's happening where there isn't as much scrutiny as a publicly regulated industry other then multi-million dollar bonuses one year and the next year being canned for their leadership into subprimes.
average (anonymous) says…
I, for one, am willing to pay more for wind power. I'm even willing to pay more for nuclear (preferable to coal, IMHO). I'm not much inclined to pay for Westar's executive luxury and lobbying wing. But, I don't have a choice, because Kansas is behind the times on getting customer choice.
camper (anonymous) says…
Sad to say, but a good majority of the people in the environmental biz really don't care about a cleaner environment. It is merely a money grab. I work for a company who was forced to install a 1.2 million capital investment in a oil/water discharge seperator. The oil in question was vegetable oil. The annual amount of oil discharged into the drainage sytem, less than 1 gallon...similar to most household kitchens. A good chunk of this 1.2m went to engineering and environmental consultants.
Bottom line, we will never live to see any progress in making our environment cleaner as long as we have these folks who's main interest is going after businesses with deep pockets.
Centerville (anonymous) says…
That was fast! Sebeleus promises them all the rate increases they want if (wink,wink) they invest in wind, they get 99% of what they want, then they drop the wind plans. Keep a close eye on Westar PAC and Westar employee political contributions.
tolawdjk (anonymous) says…
Oh Boo Hoo, Marion.
If I went out and bought 1 share or 1,000,000 shares of XYZ company, I bear the risk of its future performance. I don't get to go to the public and ask them to bear the burden of my risk.
The only reason Westar can take thier ball and go home with this is because they are the only player with a ball.
pace (anonymous) says…
Looks like Weststar was looking for a built in profit, The statement"The KCC said the actual cost to construct wind farms would be allowed in Westar's rates." wasn't enough. I am happy to pay for green, just not greed.
BigPrune (anonymous) says…
Sometimes monopolies don't get their way, immediately.