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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

bklonnie 3 years, 3 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.

somedude20 3 years, 3 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!!!!!

ksjayhawk74 3 years, 3 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.

Ron Holzwarth 3 years, 3 months ago

Because of global warming, trees have suddenly started growing much faster. Literally overnight, actually.

overthemoon 3 years, 3 months ago

I don't know if you're being sarcastic or not...but I have thought that inspite of the hot weather, trees and weeds around town seem to be pretty lush and looking quite overgrown. Is that the weather, the climate, or lack of funds for pruning and maintenance?

overthemoon 3 years, 3 months ago

I don't know if you're being sarcastic or not...but I have thought that inspite of the hot weather, trees and weeds around town seem to be pretty lush and looking quite overgrown. Is that the weather, the climate, or lack of funds for pruning and maintenance?

Ron Holzwarth 3 years, 3 months ago

Yes, I was being sarcastic. I do that quite often, with me you can never tell.

We've been getting a lot of rain lately, and a lot of very sunny days also. That's why everything is growing so well this year. There were record harvests all over the state, with a few exceptions due to storm damage.

rtwngr 3 years, 2 months ago

But, technically, the trees are literally growing overnight.

Cant_have_it_both_ways 3 years, 3 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!

gr 3 years, 3 months ago

That's for future purposes. Maybe controlling your use of power. Maybe charging you more for using it. Or a special Westar tactic, charge you more for not using as much and call it "reduced use normalization charge" or something. Or for spying on how much you are using and analyzing if suddenly your power bill went up say, 6 grow lights worth.

gr 3 years, 3 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.

wowiekt08 3 years, 3 months ago

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

Ron Holzwarth 3 years, 3 months ago

wowiekt08, you should be thankful that when the power goes out, the meter stops.

(at least I hope it does!)

CHEEZIT 3 years, 3 months ago

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

Bob_Keeshan 3 years, 3 months ago

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

Catch 22.

BlackVelvet 3 years, 3 months ago

Tree "trimming"? no, you mean tree BUTCHERING. At least on the east side of town.

Hooligan_016 3 years, 3 months ago

Totally agree with the "butchering" aspect. They came through the alley between Vermont/Kentucky between 18th/17th and absolutely mangled the last 3 trees at the end of the block.

Then they came back a week later and entirely cut down the mutilated trees.

skinny 3 years, 3 months ago

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

ResQd 3 years, 3 months ago

I've always wondered why there was no competition. Can anyone tell me exactly why that is?

Keith 3 years, 3 months ago

Westar built and maintains the grid. Any competition would have to build their own grid or pay Westar to use theirs. Advantage Westar.

Ron Holzwarth 3 years, 3 months ago

There are some services that are best handled by a monopoly. Examples are the water supply, sewage systems, and the highways.

Electricity could be supplied to customers with a second grid, but that would present some difficulties.

Crazy_Larry 3 years, 3 months ago

Water, sewer and highways are paid for and operated by municpalities and the state--not corporations. I'm all for the state taking over electricity and natural gas as well. These items are necessary to modern life and should not be 'for profit.'

Ron Holzwarth 3 years, 3 months ago

Municipalities and the state have the monopolies.

Crazy_Larry 3 years, 3 months ago

And Westar has the monopoly on power supply for the city of Lawrence.

Crazy_Larry 3 years, 2 months ago

The $20,000 question: Would you rather have a 'for profit' monopoly, or a monopoly by the government?

overthemoon 3 years, 3 months ago

Agree, but that could be changing soon. Privatization of water facilities is a big new profiteering frontier both in the US and around the world. BAD. BAD. BAD.

Crazy_Larry 3 years, 3 months ago

The Cochabamba protests of 2000, also known as the "Cochabamba Water Wars," were a series of protests that took place in Cochabamba, Bolivia's third largest city, between January 1999 and April 2000 in response to multinational participation in the infrastructure and management of the city's municipal water supply.

true_patriot 3 years, 3 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.

Carol Bowen 3 years, 3 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.

SDTPlant 3 years, 3 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.)

Jaminrawk 3 years, 3 months ago

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

clovis_sangrail 3 years, 3 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.

countrygal07 3 years, 3 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.

Jake Esau 3 years, 3 months ago

I live in a 2000 square foot house and my thermostat is at 80 during the day and 72 at night. Almost all my light bulbs are CFLs. My bill was over $300 last month. That being said, I'm also a KCPL customer in Overland Park, but I would suspect the rates are comparable.

jafs 3 years, 3 months ago

We have our electric and gas bills on the "average payment" plan - that way we pay about the same each month, rather than dealing with large swings.

I highly recommend it, if KCPL offers it.

bklonnie 3 years, 3 months ago

Please tell us what your last (most expensive of the year) bill was? Also, please define the parameters of your home, and indoor tstat settings. I'm talking about orientation of your house, overhangs (that would shade the windows), how many trees, etc. There is a lot that can factor into cooling costs.

Ron Holzwarth 3 years, 3 months ago

If your electric bill was over $300 a month, you should be able to easily grow over $3,000 worth a month of "crops".

gphawk89 3 years, 3 months ago

Mine was $350 last month. Didn't show that one to the wife. 3800 square feet, thermostat set to 76, and the front of the house (lots of windows) is in full sun from late morning through late afternoon. But if that's the cost of staying comfortable when its 100+ outside, so be it.

Ron Holzwarth 3 years, 3 months ago

Don't put your "crops" in the front window.

countrygal07 3 years, 3 months ago

KRichards- Didnt ask you to feel sorry for me. I was just making a statement. I dont keeo my thermostat at 67 its at 70. I dont have holes where windows should be. You always have negative things to say no matter what the topic is. Guess thats what I have to look forward to when I get your age and nothing better to do in life than sit in front of the computer and make unwanted comments. Must be hell being you. Miserable...

Shelly Welcher 3 years, 2 months ago

I personally live in a 900 sq ft, 2 bedroom place. All windows are shut and locked. My electric bills are absolutely rediculous at 250 a month!!! There's NOTHING normal about that!!!!!

love2bike 3 years, 3 months ago

Perhaps you should look at making your home more efficient. My bill for June and July (combined) was $115. I live in a modest home with new windows, insulation, termostat at 78 constant, and I don't use a clothes dryer.

Ron Holzwarth 3 years, 3 months ago

I know a man who had a photovoltaic system installed on the roof of his carport to provide his own electricity.

It cost tens of thousands of dollars to install it, and a lot of the time it won't generate any electricity at all, like at night or when the roof is covered with snow. He can sell some electricity back to the power company on sunny days, though.

He didn't say exactly, but apparently it will break even in about 150 years, if it lasts that long.

The real problem is the inverters. They have a life expectancy of perhaps 10 to 15 years, while the solar panels themselves are expected to last 30 to 50 years.

Ron Holzwarth 3 years, 3 months ago

But, the systems are getting better and cheaper all the time, and so I think it's a bit early to rush to invest in one. No one else anywhere near here has a system like his.

Wonder why.

overthemoon 3 years, 3 months ago

The advances in battery design for storage of solar or wind energy could change the whole scenario.

Ron Holzwarth 3 years, 1 month ago

No argument from me on that point. I have been very sure for a long time that battery technology will become much better in the future not only for that reason, but also so that electric cars will become practical as well.

kernal 3 years, 3 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!

somedude20 3 years, 3 months ago

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

jmadison 3 years, 3 months ago

Somebody has to pay for Wittig's legal judgment.

imastinker 3 years, 3 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.

Ron Holzwarth 3 years, 3 months ago

Meanwhile in foreign countries, there are few if any environmental controls, and child labor is unheard of because it's considered to be normal.

No wonder outsourcing is so much cheaper.

Kim Murphree 3 years, 3 months ago

Nice try...but until companies like Westar, who are contracted to provide public services, make their company financials public so that we can actually know where the money goes, I don't buy for one minute that this increase or most of the others are actually necessary. Profit margin may be slipping, but I am not convinced the regulations are the cause---may want it to seem that way because they sure don't want to change or move toward lower costing fuels...that's why we need other alternatives for power.

hipper_than_hip 3 years, 3 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.

Kim Murphree 3 years, 3 months ago

Oh for crying out loud...this is not the first time Westar has asked for and received an increase, you know? Several more happened under Bush and Reagan...and you don't even know what the money is really going toward because there is no transparency. Give it a rest!

Kelli Preston 3 years, 3 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.

Ron Holzwarth 3 years, 3 months ago

That is a very good idea, but it's already being done in many locations.

overthemoon 3 years, 3 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.

George Lippencott 3 years, 3 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!!!

Kim Murphree 3 years, 3 months ago

What a crock...now you want to blame the President for Westar Energy practices? You don't even know what they are really spending on the money on! I say if a company has an exclusive on a public contract, like a utility, then their financial records should be open to public scrutiny. Then, we'll see what's really up. As for this post...nice try, but no.

George Lippencott 3 years, 2 months ago

No sir, you are serving up the bull! The KCC will review this request. Our advocates will dissect it and ferret out inappropriate charges.

But, your ignorance here is frightening. This is not like a normal corporation - our oversight is real and detailed.

If you want sustainable energy you and I will pay for it. If you increase the cost of carbon, you and I will pay for it. Any regulatory requirement placed on Westar will be paid for by you and me.

One of the right wing hoards estimates that we spend over 2$.8T a year in regulatory costs. I have seen no comparable estimate from the left. Regulation, no matter how desirable, costs money.

MasterShake 3 years, 3 months ago

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

love2bike 3 years, 3 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.

MasterShake 3 years, 3 months ago

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

usnsnp 3 years, 3 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.

been_there 3 years, 3 months ago

But, but, we have to be a Tree City USA and that can only be done by planting trees where they don't belong. :P

Richard Heckler 3 years, 3 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!

Sunny Parker 3 years, 3 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 "

JayhawkFan1985 3 years, 3 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.

pure_republication 3 years, 2 months ago

JayhawkFan: It is not the right that has caused this but the OBAMA white house allowing the EPA to impose regulations on businesses. Place blame where blame is due.

jafs 3 years, 2 months ago

EPA - Environmental Protection Agency.

The job of the EPA is to protect the environment - if businesses are acting in ways that harm it, it is completely correct for them to regulate those businesses.

some_random_person 3 years, 3 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....

just_another_bozo_on_this_bus 3 years, 3 months ago

"But the average hippy doesn't understand this at all, "

You just lost any creditability you might have had.

some_random_person 3 years, 2 months ago

I don't need to look to you for "credibility." I don't work for a utility but I'm in the industry and know vastly more about these new regs and budgets than the average person. It just amuses me how these other posters sound off like they know what they are talking about, but I post to set the record straight. However, I'm undecided as to whether I agree with the amount of the increase but I DO however agree an increase is needed. I'm just tired of the liberals here that sound off to protest something just for the sake of protesting, getting real sick of it....

jafs 3 years, 2 months ago

So you're saying that without these fines, Westar wouldn't be adequately maintaining their infrastructure, and we'd have more power outages and potential blackouts.

I guess that's a choice we could make, but people sure seem to complain a lot about power outages.

It's interesting that it takes federal fines to induce an electric company to maintain their lines well enough to fulfill their function of providing electricity in a reliable manner.

some_random_person 3 years, 2 months ago

You'd be surprised. The fines exist to prevent massive blackouts that can cost the economy billions of dollars in set backs. And yes, these utilities trim their budgets and often times under-budget certain areas. The fines were put in place to make sure budget dollars are spent in the right areas, mainly maintenance and vegetation control. It's very expensive to maintain infrastructure to meet new regs, hence the rate increase.

And yes, I'm saying without these fines a utility would be more apt to save the money rather than spend it on infrastructure maintenance, fostering a more likely situation a blackout could occur. I can tell you, some utilities really don't give a damn (none around here) about vegetation control, they don't care about the risk of a blackout, they'd rather keep the money than spend it on preventitive maintenance....So that's why the gov't is stepping in to make the grid more reliable, because basically some utilities are very irresponsible....

happyrock 3 years, 3 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.

just_another_bozo_on_this_bus 3 years, 3 months ago

'If you don't like it why don't you have the state buy the company."

That's a great idea. But we'll determined the value, OK?

jafs 3 years, 2 months ago

Utility companies have generally been safe investments that offer low rates of return relative to other investments.

How much return do you expect from Westar?

And, since the state regulates the utility, it's up to the state to approve any rate hike requests - why should we (the taxpayers) pay more so that you can get a higher return?

You could always invest in a higher risk investment to do so.

pure_republication 3 years, 3 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!

some_random_person 3 years, 2 months ago

Correct, it's the federal gov't that is handing down the regs, NOT the state. And to be honest, this was coming down before the Obama administration. It HAS been accelerated under Obama and some other new regs have hit recently but honestly it's not an "Obama agenda." And that's coming from a conservative, just being honest....

Flap Doodle 3 years, 2 months ago

Mr. Non-English-Speaking Spammer strikes again.

rtwngr 3 years, 2 months ago

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

purplesage 3 years, 2 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.

George Lippencott 3 years, 2 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.

usnsnp 3 years, 2 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.

George Lippencott 3 years, 2 months ago

Actually the utilities have asked to be paid for the service they no longer provide because we are conserving.

And if we ask for new plant and equipment (wind energy) and reduce our power usage, we will pay more for what we use as the costs of the new capacity must be paid across a lower usage.

You can not win!!

George Lippencott 3 years, 2 months ago

Might also note that the stockholders provide the capital to operate, maintain and upgrade the system. If this was a publically owned corporation that money would have to be borrowed from the banks and the interest paid by you and me. Money to the stockholders is just a cost of dioing business - otherewise it would be money to the banks.

That said, I would be very happy if Westar and all utilities were not stockholder owned.

jafs 3 years, 2 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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