Archive for Monday, November 28, 2011

Public hearings set on proposed Westar rate hike

November 28, 2011

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Public hearings

Public hearings on Westar Energy’s $91 million rate increase request will be at 6 p.m. Tuesday in Topeka and Wednesday in Wichita.

The Tuesday hearing will occur at the Kansas Corporation Commission office at 1500 SW Arrowhead Road. It will also be broadcast by video conference in the College Center Conference Room at Kansas State University-Salina and Room 315 in Hughes Hall at Pittsburg State University.

The Wednesday hearing will be at Wichita State University in Room 180 (Entrance N) of the Eugene M. Hughes Metro Complex.

Recent rate increases

Since 2009, Westar customers have seen a $265 million increase in rates. The company is now seeking another $91 million increase. Here is a breakdown of rate increases. Note: The 2008 rate increase took effect in 2009.

2008: general rate increase, $130 million or 11 percent.

2009: transmission delivery rate increase, $31.8 million or 2.4 percent.

2009: environmental cost recovery rate increase, $32.4 million or 2.5 percent.

2010: abbreviated rate increase, $17.1 million or 1.2 percent.

2010: transmission delivery rate increase, $6 million or .4 percent.

2010: environmental cost recovery rate increase, $13.5 million or .9 percent.

2010: energy efficiency rate increase, $5.8 million or .4 percent.

2011: transmission delivery rate increase, $17.4 million or 1.1 percent.

2011: environmental cost recovery rate increase, $11.2 million or .7 percent.

2012: rate increase request of $91 million or 5.85 percent.

— Source: Westar Energy

— State regulators on Tuesday will hold the first of two public hearings on Westar Energy’s $91 million rate hike request.

If approved by the Kansas Corporation Commission, the proposal would increase residential customers’ bills by approximately $6.50, or 5.85 percent, per month, and give Westar shareholders a 10.6 percent return on equity.

Officials with Westar, the state’s largest electric company in Kansas, say the increase is needed to maintain a reliable system, comply with environmental regulations and keep its commitments to the employee pension system, which was hurt by stock market losses.

“Our costs to provide reliable service and comply with new regulations has increased since our last rate request, which has led us to ask for a modest increase in price,” Westar spokesman Leonard Allen said.

The Citizens’ Utility Ratepayer Board, or CURB, is opposed to the proposed increase.

“Westar is asking for 10.6 percent shareholder profit, which we believe is clearly excessive in a market where 30-year bonds are selling below 3 percent,

unemployment is high and risk has been moved to ratepayers through all of the line item riders,” said David Springe, consumer counsel for CURB.

But Westar’s Allen said the 10.6 percent return on equity is in line with Westar’s peers in the electric industry.

The “line item riders” Springe referred to are increases that Westar receives by passing through costs to ratepayers.

In 2008, Westar requested a $177 million rate increase and was granted a $130 million increase that took effect in 2009. Since then, the utility has also received several increases from the KCC through pass-throughs of costs related to transmission investments and environmental improvements at its plants.

“We need to rethink this policy of allowing annual increases with little oversight,” Springe said.

About $20 million of the proposed increase now before the KCC is to expand a tree-trimming program. Westar says this will reduce outages from tree branches falling on power lines, but Springe said $20 million extra for this job seemed high when Westar is already spending $25 million per year on tree trimming. Allen says that the preventive trimming program will save money in the long run and increase reliability.

Another $37 million is needed to help Westar’s employee pension fund, which was hurt by stock market losses.

Comments

just_another_bozo_on_this_bus 3 years, 5 months ago

“Westar is asking for 10.6 percent shareholder profit, which we believe is clearly excessive in a market where 30-year bonds are selling below 3 percent, unemployment is high and risk has been moved to ratepayers through all of the line item riders,” said David Springe, consumer counsel for CURB. But Westar’s Allen said the 10.6 percent return on equity is in line with Westar’s peers in the electric industry.


A 10.6% return on an investment in a government-protected monopoly for electricity, something pretty much no one is going to go without, is ridiculously excessive. If that truly is what Westar's peers get, the KCC should be a trendsetter at lowering that amount. A 5.6% return in this economy would be more like it. If they want more than that, they should be required to invest all of it on alternative energy sources and increased efficiency.

Kim Murphree 3 years, 5 months ago

"so-called" really??? you ARE kidding right? Aquifer drying up, polar bears drowning because the polar ice is melting...umm that's right MELTING...and ice MELTS when temperatures are WARMER...glaciers receding...and you still want to believe the fairtytale that human beings and their use of fossil fuels have nothing to do with any of it. You must be an easy target as long as there is an "R" by someone's name. Bet you'd buy the Brooklyn Bridge from Dubya.

Tony Kisner 3 years, 5 months ago

The rate payer shouldn't be funding the pension shortfall. Eliminate the pension and take the risk that no one shows for work on Monday. As a rate payer I bet they will even for a two percent wage cut.

George Lippencott 3 years, 4 months ago

I might point out that a goodly portion of Westar’s increases are related to public policy choices imposed upon them. We are paying for the introduction of wind energy – it costs much more in real dollars then the current alternatives. We are paying for EPA requirements to reduce emissions from our coal fired plants (anybody notice that plant just north of here). We are paying for energy efficiency activities internal to Westar and where Westar is an advocate for the state.
Despite silly comments that appear in these pages from time to time we are trying to address climate change. In that light my Westar bill has increased about 50% since we moved here despite a ten percent decline in usage resulting from energy efficiency investments. We cannot have it both ways or just maybe the screams here are coming from people that want it all but want somebody else to pay for it?

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