Topeka Kansas lawmakers have been considering a proposal that would allow utility companies to raise rates before the state approves an increase.
The proposal for "interim rates" is contained in a House bill proposed by natural gas companies. The measure was the subject of a hearing this week in the House Energy and Utilities Committee, the Wichita Eagle reported Wednesday.
The bill would allow a utility company to increase rates 30 days after it files with the Kansas Corporation Commission for permission. The company would give refunds if the commission, which has 240 days to consider rate hikes, decides the utility is entitled to less than requested.
The proposed measure would address what utilities call "regulatory lag," said Curt Floerchinger, a spokesman for Black Hills Energy, which is one of the companies pushing for change.
One of the questions is what happens when customers move while a rate case is under way and the utility ends up owing them a refund.
Floerchinger said in states where Black Hills operates that already have interim rates, including Iowa and Nebraska, the company tries to get a forwarding address when customers call to disconnect their service. But that doesn't always work. The Iowa State Treasurer's Office said that state is holding $2.7 million in unclaimed refunds from electric, gas and phone companies.
The Citizens' Utility Ratepayer Board, a state agency that represents residential and small-business consumers, opposes the bill.
"That's a lot of money, I would not like to see a fund like that in Kansas," said David Springe, chief consumer counsel for CURB. "I would like to see the people keep that money and not have it end up in unclaimed property."
The agency has issued a rare call for utility consumers to contact their state legislators and ask them to oppose the bill. Springe said it would overturn 100-plus years of Kansas law that has allowed utility ratepayers a chance to have their say before rates increase.
"One person's 'regulatory lag' is another person's due process," Springe said. "How would a Boeing employee who just got laid off feel about loaning their utility some money?"
A full rate case can take as long as two years, including a "test year" to establish a utility's cost of doing business and the 240 days for the commission to analyze the request and decide how much of an increase to grant. Historically, the commission has seldom given utilities their exact request.
The House committee chairman, Carl Holmes, R-Liberal, said he is not taking a public position but expects to bring the bill up for a vote, probably by next week.