Archive for Tuesday, November 29, 2011

Westar ratepayers oppose proposed $91 million increase

November 29, 2011


— Westar Energy on Tuesday said it needed a $91 million rate increase to provide reliable service, but several customers said the state's largest electric utility needed to economize.

James Peek of Topeka complained of executive salaries at Westar, saying, "I see only loosening of the belt."

He noted that former Westar president and chief executive officer William Moore's compensation package was approximately $1 million in 2008 and increased to nearly $6 million in 2010. Later, Westar officials said much of that was due to Moore receiving a stock award over a three-year period that was reported in 2010.

Even so, David Springe, consumer counsel for the Citizens' Utility Ratepayer Board, said, "It's good to be a Westar executive."

Their comments came during a public hearing before the Kansas Corporation Commission, which will decide how much Westar should get. The three-member commission is holding a second hearing Wednesday in Wichita.

An evidentiary hearing will be held in February. The commission must rule in the case by late April.

If approved by the KCC, 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.

Freda Dobbins of the small town of Goff in Nemaha County said her church struggled last summer to pay its utility bill.

She opposed the part of Westar's proposal that would provide a 10.6 percent return on equity.

Dobbins said people who are able to save money are lucky to get a one percent or two percent return. "Why are people being asked to use that little bit of income to help pay 10.6 percent?" she asked.

Greg Greenwood, a senior vice president at Westar, said, "This case is really about providing reliable service to our customers."

Greenwood argued that some of the increase was needed to provide fair wages to Westar employees.

But Peek said in the current economy, there were many people who were not getting pay raises.

Springe noted that even though Westar had not received a general rate increase since 2008, it had received several pass-through increases totaling approximately $120 million.

He urged ratepayers in the audience to contact their friends to try to get more people to comment on the proposed rate increase to the KCC. Only about a dozen members of the general public were at the Topeka meeting, and a handful could be seen at remote sites in Salina and Pittsburg that were connected by video-conference.

Public comments on the proposed rate increase can be made through Feb. 8. Comments should reference Docket 12-WSEE-112-RTS and sent to the Kansas Corporation Commission, Office of Public Affairs, and Consumer Protection, 1500 SW Arrowhead Road, Topeka, KS 66604-4027. Comments may also be submitted by email at through the KCC website,, or by calling 1-800-662-0027 or 785-271-3140.


gseibel 2 years, 4 months ago

Can anyone tell me why this article doesn't appear when i search the LJWorld website for "Westar"? Is it just too new?


bobberboy 2 years, 4 months ago

who are the people that are going to decide the outcome of this ? Anyone know ?


bobberboy 2 years, 4 months ago

Just the same as no one want's their taxes to go up - no one want's their electric bills to go up ! Why do we allow corporations to continue to gouge us without complaint - but if we are approached about increase in taxes to provide services in our communities for those in need we balk at the mention !!!


nut_case 2 years, 4 months ago

Meh - my first bill with the new 'smart meter' showed 33% higher 'usage' than the same month last year. That is enough 'rate increase' for me.


toe 2 years, 4 months ago

The amount of the increase is simply not enough for many. Electricity and gas are hated industries. Punishing the users is the weapon of choice.


somedude20 2 years, 4 months ago

"This case is really about providing reliable service to our customers." So if this goes through, and I am sure it will, if a "bird" or alien crashes into a transformer, will the rate payers get a rebate? I hate to say it but look at the govt and see how they are (trying to) cutting the budget because times have changed and we aint rich no more. We just had a rate increase the other year and let me tell ya, these bills are already too high! The electricty is too damn high!


imastinker 2 years, 4 months ago

Can anyone explain the use of the term "return on equity" rather than "return on investment?"

To me, use of the term would indicate use of leverage to purchase the stock, so the equity position may be a percentage of actual value.


Jaminrawk 2 years, 4 months ago

Complete joke. Everything gets more expensive and the cost of living keeps going up as unemployment stays pretty high and people are still losing their houses. Glad the Westar executives can afford their timeshares though.


gseibel 2 years, 4 months ago

BTW, the 10.6% return on equity number is also a sham. The average yearly return over the last two years including share price change and dividends is already 21.5%. On an industry with prices guaranteed by the government. And they want more, in this economy.

Over the last 4 years their profits have increased 18.5% while inflation totaled only 8.6%. That wasn't by running the corporation more efficiently, it was by extracting rate increases from the KCC. This one needs to be stopped.


gseibel 2 years, 4 months ago

Anyone remember this:

Kansas City Business Journal Date: Friday, August 5, 2011, 10:14am CDT

David Wittig will receive approximately $39.1 million from the Topeka-based utility as part of a settlement.

Leonard Allen, a spokesman for Westar, confirmed the settlement. Allen had no further comment on the settlement, other than to point out that stockholders would foot the bill for the Wittig settlement, not ratepayers.

In May, the company said it would pay Lake $26.3 million.

That's $65.4 million out of shareholder dividends. On 117 million outstanding shares that's about 56 cents per share. The total deducted so far? 0. None. Not one penny. 2009 dividends: 30 cents every quarter. 2010 dividends: 31 cents every quarter. 2011 dividends: 32 cents every quarter.

So I say not one penny in rate increases until the shareholders take their hit.


Jayhawk1958 2 years, 4 months ago

sorry but this is one industry that needs to be regulated by the government.


Zac Hamlin 2 years, 4 months ago

Too bad we don't have cooperative utilities, we could have a comment and a vote.


JayhawkFan1985 2 years, 4 months ago

Contrast his salary with that of our three most recent governors...Sebelius, Parkinson and Brownback all of whom made less than $150,000 per year. There is something wrong when corporate executives get paid at a rate exceeding ten times that of government executives that have more responsibility and perform their jobs in the spotlight to a far greater degree. The private sector needs to be reigned in far more urgently than does government...


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