Kansas City, Mo. Kansas regulators on Monday approved the consolidation of the rates paid by customers in Westar Energy Inc.’s northern and southern divisions.
In its order, the Kansas Corporation Commission noted that it has supported equalizing rates for customers receiving the same type of services in the two divisions since Topeka, Kan.-based Westar formed from the merger of two companies in the early 1990s.
Commissioners said the difference in rates between the two divisions is very small and delaying the consolidation further may only enlarge the rate swings some customers will experience. They also said future major investments in the company’s power plants and other infrastructure should be borne by customers statewide, not just those in one division.
It downplayed concerns, particularly among customers in the southern division, that consolidating rates now is unfair.
“After reviewing all the evidence,” it wrote, “the commission finds that arguments in favor of moving forward with final steps to achieve rate consolidation at this time far outweigh those arguments seeking to maintain separate ... territories.”
Rates in the company’s southern division have traditionally been higher than those in the northern division, largely because the southern customers were helping pay off the construction and maintenance of Wolf Creek, the state’s only nuclear power plant, about 55 miles south of Topeka.
In 2000, according to Westar, southern customers paid an average of 8.3 cents per kilowatt hour of electricity, 32 percent more than the 6.3 cents paid by northern customers.
Now Westar’s 366,000 northern division customers pay an average of 8 cents per kilowatt hour, while the 313,000 southern division customers pay 7.8 cents per kilowatt hour, a difference of only 0.3 percent. The gap between residential customer bills is even smaller, with the average northern bill at $77.28 per month, compared with $77.31 in the south.
The next step is determining how to equalize the rates. The commission refused to endorse a specific proposal, instead saying its staff will map out a process in the next 30 days for Westar and customer groups to begin fashioning a consolidation plan themselves.
Westar says consumers won’t see an immediate change in what they pay for using the same amount of electricity, and the utility won’t generate additional revenues.