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Archive for Thursday, August 25, 2011

Westar seeks $91 million increase

August 25, 2011

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— Westar Energy, the largest electric company in Kansas, is seeking a $91 million rate increase that would raise the typical residential ratepayer's bill by $6.50 per month.

Westar officials said Thursday that the 5.85 percent increase in its base price was needed to comply with new federal regulations and other higher costs including trimming trees to keep them away from power lines.

"Our customers and our state depend on reliable electric infrastructure," said Mark Ruelle, Westar's chief executive officer. "Unfortunately, the cost of keeping our system reliable has gone up."

The rate request will be considered by the Kansas Corporation Commission.

Earlier this month, Westar, which has approximately 700,000 customers, announced it would pay its former leader, David Wittig, $36 million plus $3.1 million in legal fees to settle a long-running contract dispute.

Wittig and another former executive, Douglas Lake, were indicted on charges that they tried to loot the company. Their first trial ended in mistrial, and convictions in a second trial were later overturned. Westar announced in May it had settled with Lake for $26 million.

Westar officials said the payment to Wittig and Lake would be made with money that shareholders set aside and not by ratepayers.

Comments

mongo55 2 years, 7 months ago

Buy the company what a laugh. Why do you think they pay all these high salary's now? K.G.&E. was bought by K.P.&L. K.G.&E. parasites stayed aboard most K.P.&L executives were let go. I'm only going to say this once "You can't pry it from their fingers even if they did name a price." Question I have for you company shareholder is why are you not responsible? Why does this company have almost the same board of directors as it did during the Wittig regime. EVERYONE of those spineless gobs of spit need to be gone forever!

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jafs 2 years, 7 months ago

Many of the things that people are complaining about are directly related to the for-profit nature and public corporation status of Westar.

In order to make a profit and satisfy their shareholders, Westar needs to bring in more revenue than they need to meet their expenses by a decent margin.

If it were a non-profit organization, it wouldn't need to do that.

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usnsnp 2 years, 7 months ago

Don't know about regulations or tree trimming. But here is something to think about, as long as any public utility is guarinteed a specific rate of return out rates will go up. If people conserve and cutback on the amout of electricity they use, rates will go up because of a guarinteed rate of return. So the less electricity people the higher the rates will go. Customers cannot win at the present time.

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George Lippencott 2 years, 7 months ago

With Westar we pay for whatever. If we do more preventive maintnance we pay. If we are fined because we don't, we pay. If new regulations are imposed we pay. If we fail to implement the new regulations we pay. They are a public utility not GE - some of you need to do some homework before you soil yourselves with drivel.

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purplesage 2 years, 7 months ago

Right on, rtwngr. At one point during the Witting / Lake debacle, they actually admitted that the legal costs were adversely affecting Westar.

Now that Wittig collected, what was it , $36 million?, -- while no longer working for Westar, those of us who haven't had a raise in a couple years because of the Obama economy, have to be a bit cynical.

I'm pretty tired of the erosion of my ability to make a living . Westar's mismanagement of their position as the public, and therfore monoploizing utility is a bitter pill to swallow.

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rtwngr 2 years, 7 months ago

I am not interested in compensating Wittig. Not my problem. I hope the KCC says no.

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pure_republication 2 years, 7 months ago

This is not Brownback's doing as some suggest! It is an out of control Obama EPA system that forces new regulation on private business so they have to increase cost to stay in business, however to cut trees limbs to clear area that should have been in their budget long before this increase!

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happyrock 2 years, 7 months ago

As a holder of Westar stock I am tired of hearing all of your complaining about higher rates. We shareholders have invested our money in the company and expect a return. If you don't like it why don't you have the state buy the company.

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some_random_person 2 years, 7 months ago

Wow, the general public is truly clueless! Reading these comments fortifies that belief...

The increase in costs due to tree trimming and new regs IS legitimate. I have knowledge of exactly what this increase is related to. Now, $91M as the amount of addt'l cost is up for debate, but I can 100% agree with Westar's assessment of increased costs.

And when they say "tree trimming," they don't mean your backyard you idiots! They are talking about vegetation growth along high-kv transmission lines, you know, those things that bring the nuke power up to Lawrence from Burlington. And yes, trimming trees along 3,000+ miles of transmission line costs MILLIONS PER YEAR!!! Although vegetation growth isn't a new problem by any means, however more strict federal regulations is a new development over the last few years. The feds are hitting utilities with VERY steep fines for a vegetation contact on a transmission line (which knocks out power to a wide area, potentially causing a blackout), fines of millions of dollars. Consequently, Westar is raising rates so they can keep away from these hefty fines and comply with other federal regs relating to infrastructure engineering. The major NYC blackout in the NE back in 2003 was from a vegetation contact in the Ohio Valley!!!! This is a serious problem that our entire transmission power line infrastructure is exposed to every year!!! But the average hippy doesn't understand this at all, because the average Lawrence hippy lives in their own bubble and can't think past the power lines hooked into their huts....

Now, I'm not saying $91M is the magic number, but I do know the increased costs Westar cites are legit....And you people really don't need to be opening your mouths if you don't know what you're talking about....

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JayhawkFan1985 2 years, 7 months ago

It would be nice if Westar could tell us which federal regulations are increasing its costs. This is typical right wing propanda. Let's not forget that these federal regulations are reducing the air pollution that increases costs for families of children with asthma, persons with emphysma and many other illnesses. Why does big business presume that costs should be socialized while profits should be privatized?

I also don't undestand why the powerlines in Lawrence, particularly on the newer west side of town, aren't buried. Most truly progressive cities require power companies to bury new utilities. Obviously, this wouldn't be the cast for the high voltage transmission lines, but it is true for the distribution lines.

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HollisBrown 2 years, 7 months ago

Duh! $48 million is going into David Wittig's pocket. He needs a new billiard table and some more gold plated seat belts.

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sunny 2 years, 7 months ago

Did you miss this part? "Westar officials said Thursday that the 5.85 percent increase in its base price was needed to comply with new federal regulations "

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Richard Heckler 2 years, 7 months ago

Corporate america sees this way. Last year we cleared $50 million. This year we cleared 45 million after the CEO was given a $5 million raise due to hardship thus his total pay package is only worth $73 million plus an $81 million golden parachute in the event this CEO screws up and must a submit a resignation.

On almost forgot to mention shareholders will be receiving .76 cent per share dividend this quarter.

Ratepayers now understand why our reckless spending needs to be reimbursed. Brownback will praise the increase as some will find its' way into political campaign cookie jars.

What are the answers to corp fraud?

In this case nationalize the energy industry so it may be managed by ratepayers as shareholders and fire all upper level management and the BOD's.

Next:

One answer to problems such as this: CUT OFF special interest financing of elections! YES even at the local level.

Our government is always claiming the USA is about democracy. In that case allow the citizens to practice democracy by allowing citizens to vote in these measures come 2012:

Let's demand a new system and vote in Fair Vote America : http://www.fairvote.org/irv/ Demand a change on the next ballot.

Let's have public financing of campaigns. Citizens cannot afford special interest money campaigns for it is the citizens that get left out. Let citizens vote on this issue. http://www.publicampaign.org/

Bribery of elected officials and raping the ratepayers is simply stinky!

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bicurious 2 years, 7 months ago

My domestic partner and I are going send a letter to BrownStripe. This is more right-wing abomonation!

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usnsnp 2 years, 7 months ago

Question, how many of the trees that are problems belong to the city. If you look at the trees along the streets where there are power lines, there is a good chance that they are in the cities right of way thus they belong to the city. There are many areas of the city where the trees that are in the right of way have been neglected and allowed to grow to large, thus not only causing electrical problems but indangering houses that they are close to.

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Kontum1972 2 years, 7 months ago

some one has to pay for wittigs ho's

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MasterShake 2 years, 7 months ago

This really does sound like a bailout for Wittig's payday.

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love2bike 2 years, 7 months ago

As far as the tree trimming issue, I would ask how much of this is preventative maintenance or a response to a power outage. Westar and their contract tree crew cleared 6 trees out of my neighbors yard Friday night (at 10:30) so they could restore power. In talking with the supervisor, most of the outage last week and the delay in getting folks back on line, was due to the trees (trees falling on powerlines as well as crews not being able to get to the problem areas because of the trees). If they had put enough into preventative maintenance, probably wouldn't have as an extensive power outage (and the OT costs to the line workers) and the delays in getting service restored.

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MasterShake 2 years, 7 months ago

Charge the homeowners for the trimming of their powerlines. Those who have buried lines can be exempt for any 'tree trimming' costs.

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George Lippencott 2 years, 7 months ago

Exactly whose fault is this rate increase?? Westar claims they are simply recovering costs associated with new regulations. if that be true (and I suspect it is at least in part) it is your friendly Obama administration and the regulatory surge of the last two years that is driving this cost.

There may have been no federal income tax increase but there have been all kinds of regulatory cost increases along with state and local tax increases.

Be careful what you wish for, it just may rear up and bite you!!!

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overthemoon 2 years, 7 months ago

I want to see a detailed cost estimate/analysis of the costs associated with new Regulations. I have a feeling that simply the mention of a regulation triggers a price increase without any actual proof that there is truly higher costs.

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Johnnys_Girl 2 years, 7 months ago

how about we put the power lines underground, like many other communities and leave the trees alone - and a bonus? that the power stays on in any storm which would reduce repair costs and save customers money.

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toe 2 years, 7 months ago

Government policies are forcing energy costs upward. This, of course, is part of the plan to punish America for success and prevent success in the future.

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hipper_than_hip 2 years, 7 months ago

Centralized generation allows for power producers across a wide area to supply electricity to areas that are experiencing heavier than usual loads. When low temps this winter took Mexican generation offline and they couldn't supply electricity to Texas, centralized generation across the US supplied the necessary power to keep everyone up and running.

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imastinker 2 years, 7 months ago

If some of you think this is the end of this, it's just getting started. Who do you think pays for things like Holcomb's mess over the Sunflower plant? We as taxpayers pay for it, and the ratepayers pay for it. Some of you blame investors, but investors can only be punished temporarily. If investors get punished, they move their money. If enough of them do that, Westar can't operate.

The cost of increased environmental and safety regulation and penalties will destroy business in this country and drive prices way up. In my OSHA class last week I was told by the instructor that the OSHA inspectors are expected to find three violations at every inspection they make. Looking at the regulations, I can see how. It is IMPOSSIBLE to operate a company that is 100% OSHA complaint. Every violation is several thousand dollars. The EPA is worse than OSHA. We as a country will chase all small businesses that manufacture or process goods out of here because of the cost of compliance. The big businesses will have big overhead and high costs.

I think it's time for all of us to get used to a lower standard of living, because it's coming.

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edjayhawk 2 years, 7 months ago

Where are the renewable energy sources that are suppose to be developing?

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bobberboy 2 years, 7 months ago

let's see now - just how long have trees been around ?

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Les Blevins 2 years, 7 months ago

There are many arguments in favor of new distributed generation. Centralized generation requires the installation and maintenance of considerable transmission infrastructure which, in addition to being expensive to install and maintain, results in a 7 to 10 percent loss of energy due to transmission over long distances. But placing a distributed energy plant near to load centers such as Lawrence, Ottawa, Topeka etc would allow for putting community power on the local distribution grid and keep more money in the community and reduce transmission losses and in effect clean up baseload carbon emissions and thus it could solve much of the reason for the cost increases Westar wants to impose on all of us in order to make investers happier.

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edjayhawk 2 years, 7 months ago

Time for a cooperative or government takeover of utilities. This hurts the poor the most and the LEIP programs continues to have cuts in funding.

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jmadison 2 years, 7 months ago

Somebody has to pay for Wittig's legal judgment.

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gay_athiest_liberal 2 years, 7 months ago

I wonder how much Westar stock does Brownshirt owns?

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somedude20 2 years, 7 months ago

This comment was removed by the site staff for violation of the usage agreement.

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bobberboy 2 years, 7 months ago

Electric companies should be run "not for profit"

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bobberboy 2 years, 7 months ago

Westar it's time for you to tighten your belt - that's what everyone else is doing !!

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kernal 2 years, 7 months ago

Well, gee, Westar, I want a higher rate of return on my retirement fund, too.

"We can all buy and install wind turbines..." Richard, I think you've got something there! But, I don't think the city would okay my putting a wind turbine in the backyard. Although, it would make a nice lawn ornament!

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Les Blevins 2 years, 7 months ago

Centralized energy systems have long been the accepted practice in North America, with large utilities controlling energy grids and supplying energy from a small number of large generation stations using traditional fuel sources (for example, coal, nuclear and large hydro). Distributed generation is an alternate approach, built on the decentralization of energy generation, characterized by a large number of generation stations of various sizes and fuel sources. There are many arguments in favor of distributed generation. Centralized generation requires the installation and maintenance of considerable transmission infrastructure which, in addition to being expensive to install and maintain, results in a 7 to 10 percent loss of energy due to transmission over long distances. Increasing the number of generation stations and distributing them over a larger geographic area decreases transmission distances, reducing energy loss and lowering pressure on the energy grid. Distributed generation can increase energy supply security by spreading the load between multiple energy sources, decreasing the likelihood of brownouts or blackouts as a result of the failure of a single energy source. Distributed generation requires some deregulation of the energy sector, allowing energy generation by those other than the major utilities; that is, IPPs. Examples of how renewable energy incentive programs have generated interest among private IPPs are widespread. In the Canadian province of British Columbia there have been over 400 applications for small hydro developments, the majority of which are from private IPPs or joint ventures between private IPPs and First Nations. Many of these proposals have been in rural areas where communities are in need of support and new development. The Regional District of Mount Waddington on Vancouver Island has had many requests from private IPPs, all promising that projects will stimulate “local development.” In reality the impact for these six projects will be limited: a total of 22 permanent jobs, the use of 50 percent local labor and attempts to purchase local supplies. “Local development” in this sense does not include profit sharing or investment in the community. This situation is typical for private IPPs, limited local benefits when compared to investments from community-owned or joint venture IPPs.

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Les Blevins 2 years, 7 months ago

Westar is saying; " "Give me your tired, your poor/your huddled masses yearning to breathe free, I want them all... ResQd said; "I've always wondered why there's no competition. Can anyone tell me exactly why that is?" Yes I can ResQd, our elected don't want to risk anything to provide any alternatives to feeding the utility whatever it wants," Jaminrock said; "Give the residents of Lawrence an alternative electric utility company and Westar can go ahead and price themselves out of my house" and I've met with Mike Amyx on how that option could be achieved. Ask him about it..

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countrygal07 2 years, 7 months ago

Talk about another case of rape and sodomy. Thats what westar is doing to all of us. My bill was over 3 hundred dollars this month.

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clovis_sangrail 2 years, 7 months ago

"Our customers and our state depend on reliable electric infrastructure," said Mark Ruelle, Westar's chief executive officer.

Which Westar has proven of late to be unable to provide.

More than half of that increase will go to replenish the corporate coffers from the Wittig/Lane pay-off.

I think the shareholders need to eat this one.

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Jaminrawk 2 years, 7 months ago

Give the residents of Lawrence an alternative electric utility company and Westar can go ahead and price themselves out of my house.

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SDTPlant 2 years, 7 months ago

Smoke and mirrors. Get it from Wittig-he took off with 39 million plus a few extra for his inconvenience.

In the area around my home, they can't even manage to finish a job they started. Out of money? Here's another example of corporate CEO's making way too much money and then making the punishment (rate hikes) fit the crime (corporate greed.)

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Carol Bowen 2 years, 7 months ago

Westar should take care of it's costs for doing business. Trimming trees is not a surprise expense. The federal regulations are not a surprise, either.

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bobberboy 2 years, 7 months ago

NO NEW TAXES AND NO NEW ELECTRIC UTILITY INCREASES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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bobberboy 2 years, 7 months ago

my electric bill doubled in the last two years. What gives !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! No one else is getting a raise !!!!!!!!!!!!!!!!!

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bobberboy 2 years, 7 months ago

my electric bill doubled in the last two years. What gives !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! No one else is getting a raise !!!!!!!!!!!!!!!!!

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Gandalf 2 years, 7 months ago

And I'm sure paying off Wittig has nothing to do with the increase.

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true_patriot 2 years, 7 months ago

Real wages are flat or falling, unemployment has spiked, a third of all real estate activity is on foreclosed properties, but privatized utilities never miss a chance to shove off the costs of maintaining their equipment and complying with regulations onto the consumer to maximize the bottom line.

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Number_1_Grandma 2 years, 7 months ago

Until Westar is held accountable to ratepayers instead of shareholders the answer is NO!

If they get a rate increase then I say allow competition for electricity and we'll see if Westar keeps asking for rate increases all the time for less quality.

Ratepayers first, shareholders last!!!

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skinny 2 years, 7 months ago

We can all buy and install wind turbines and make Westar buy electricity from us!!

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Bob_Keeshan 2 years, 7 months ago

The extra tree trimming is because trees are growing faster due to global warming.

Catch 22.

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CHEEZIT 2 years, 7 months ago

What did Tom Cruise say in "A Few Good Men"? "And the hits just keep on coming"!!!

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wowiekt08 2 years, 7 months ago

I'll pay more when I no longer have to deal with unexplained power outages.

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gr 2 years, 7 months ago

"the 5.85 percent increase in its base price was needed to comply with new federal regulations"

Hey, I've got an idea! Lets complain to the department of health and make it harder for Westar to generate or distribute power.

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Keith Richards 2 years, 7 months ago

That is an additional ~$80 dollars a year for a 'typical' customer. This makes property tax increases seam like a birthday present.

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sad_lawrencian 2 years, 7 months ago

Did he say their system is reliable?

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Cant_have_it_both_ways 2 years, 7 months ago

We get to pay for those "Smart" meters they are installing, while at the same time throwing away the meters that are working and are just fine. I say NO!

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ksjayhawk74 2 years, 7 months ago

Federal regulations and tree trimming costs $91 Million? Has tree trimming suddenly become a problem that didn't exist before?

I call BS.

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somedude20 2 years, 7 months ago

after getting a $135 bill ($83 was due/paid on 8/1 $135 is due on 8/31) after a $83 for a damn 2 bedroom apt with temp set at 78, you can kiss my Irish butt you greedy Brownbacks!!!!!

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bklonnie 2 years, 7 months ago

Hopefully the increase is declined. However, I'm sure that won't be the case, as the KCC never turns down an opportunity to screw over the people of Kansas.

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