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Archive for Saturday, February 7, 2009

Consumer watchdog in Kansas questions KCP&L expenses

February 7, 2009

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— A Kansas consumer group wants regulators to reject making Kansas City Power & Light customers shoulder some of the utility’s recent expenses, such as tickets to Worlds of Fun and sporting events.

KCP&L is seeking a 17.5 percent rate increase, but in a regulatory filing this week, the Citizens’ Utility Ratepayer Board, which represents Kansas customers on utility issues, criticized some expenses, including $200,000 for Worlds of Fun tickets and $188,000 for golfing fees and tickets to Kansas City Chiefs and Royals games. Expenses such as $5,900 for meals at Chiefs games also are at issue.

The company said the average increase for residential customers would be $12.27 a month if regulators approved the proposed rate increase. The request would have been higher if not for the purchase of Aquila Inc., the company said.

“We do not relish requesting a rate increase during these difficult economic times,” said Michael Chesser, chief executive officer of Kansas City-based Great Plains Energy Inc., the parent of KCP&L. “However, these requests are approximately $23 million less than they would have been as a direct result of operational savings realized from our acquisition of Aquila.”

Also singled out were $4.3 million in annual bonuses for senior executives and an additional $4.7 million bonus program. Making customers pay such compensation should also be reviewed by regulators, especially given the difficult economic times, according to the ratepayer board.

“The company’s claim is especially troublesome given the current economic hardship in which many of Kansas’ ratepayers find themselves,” the board said.

The agency says customers should not have to pay for those and other expenses not directly related to providing electricity.

Some other expenses questioned were in a $572,000 category that included costs for movie tickets, gift cards and flowers, as well as banquet fees at The Elms Resort & Spa in Excelsior Springs.

The ratepayer board also criticized KCP&L for the company’s “misleading” match in the Dollar-Aide program, which helps financially strapped customers pay their electric bills. The company pays 50 cents for every $1 that customers voluntarily contribute to the fund. But the company’s match, which amounts to about $107,000 a year, is also part of its rate request, which would make customers rather than shareholders responsible for the cost of the match.

Chuck Caisley, a KCP&L spokesman, said the Worlds of Fun tickets were for employee appreciation events in 2007, the year being used to calculate expenses for the proposed rate increase. Because of the economy, the company is considering having employees do volunteer charity work this year instead of going to the park.

“I will tell you it is very unlikely we will do it this year,” he said.

As for the golfing and sports tickets, he said about half of them would go to charities. KCP&L employees use some of the rest, and others are used for business purposes such as entertaining economic development officials.

KCP&L said its bonuses — for senior executives and all employees — were designed to make the company competitive.

KCP&L is asking for

$71.6 million in additional annual revenue in Kansas and $102 million in Missouri, about 17.5 percent in both states. Those figures include cash for operating expenses and to pay for environmental upgrades at the utility’s Iatan 1 and Sibley plants.

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