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Archive for Monday, April 22, 2013

Editorial: Rate shift

Westar Energy’s latest rate-increase request represents a major shift in the burden for supporting the utility from large customers to individual consumers.

April 22, 2013

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Ask and ye shall receive. Especially if you’re Westar Energy Inc.

The cheering on one sideline comes from medium and large businesses and schools. The mumblings and exclamations of discontent come from residential customers, small businesses and, unlikely as it might be, probably Kansas City Power & Light.

The current concern is Westar’s request to the Kansas Corporation Commission to raise an additional $31.7 million annually by boosting rates for its residential customers — and lowering them for some 5,500 business customers. According to figures compiled by the Citizens Utility Ratepayer Board, medium and large businesses will see their rates decline between 6 percent and 8.4 percent, resulting in about $36 million less revenue for Westar. At the same time, however, rates for residential customers will go up by 8.77 percent, resulting in an additional $62 million for Westar. Increased rates for small business will contribute another $21.5 million.

Westar and KCP&L jointly own the coal-fired power plant at LaCygne. Ironically, and perhaps unfairly, Westar probably will get a 10 percent return on its investment (approved by the KCC in Westar’s last case) for its share of the upgrades, even though KCP&L was allowed only a 9.5 percent profit on its investment at the same facility. Ask and ye shall receive.

The simultaneous shifting of the rate burden from large users to individuals and families is a disturbing trend that mirrors the shifting of the state tax burden in Kansas. Already we’ve seen corporations freed from paying income taxes while individual wage-earners continue to get soaked. Also, that sales tax increase that supposedly was to sunset this year seems likely to stay in place.

This most recent request from Westar is one in a chain of approved and pending increases that accelerated starting in 2009. They involve general rates, transmission-line rates, environmental rates, energy efficiency rates, a property-tax surcharge, “wind costs in fuel charges,” and on and on. The utility gets a tidy 10 percent profit.

On the other hand, assuming all the pending requests are authorized, typical Lawrence residential customers will see their summer electric bills go from $123 in 2008 to $196 this year, a 59 percent increase.

Altogether, those increases represent more than half a billion (with a B) in resources not available for individuals to save or spend on education, purchases to cycle through the local economy, or just plain fun. It’s time for Kansas utility customers to stand up to climbing rates.

Unlike Westar, they may not get everything they want, but they should at least ask!

Comments

skull 1 year, 7 months ago

It's ok...Westar is going to use all those profits to create jobs...

bendover61 1 year, 7 months ago

60% increase under tons of new mandates and regulations thanks to Obama.

Hawkanator 1 year, 7 months ago

I really doubt you'd like to live in a country with no regulation. You should think about what that would really mean.

ChuckFInster 1 year, 7 months ago

Westar operates facilities in several Kansas communities. Just a thought, if we are getting stabbed by Westar maybe the community govts could hand them a nice tax bill to offset the rate increase. Think of it as a surcharge for sticking their customers.

Centerville 1 year, 7 months ago

Blame the legislature: they kept that stupid renewable requirement. We're subsidizing new natural gas plants that will cover for the fact that the wind portfolio is a joke.

Hawkanator 1 year, 7 months ago

That is because we as a country refuse to invest in a smart grid that would make wind energy easier to use.

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