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Opinion

Opinion

Editorial: Rising rates

July 11, 2013

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Running that air conditioner during the triple-digit-temperature days of summer apparently is about to get more costly for homeowners and small businesses ­— and cheaper for big business.

If the Kansas Corporation Commission, which has been having its own problems of late, agrees with a rate request from Westar Energy, that’s exactly what’s going to happen. A public hearing on the matter is scheduled tonight in Topeka.

“Small-business owners, those people up and down Massachusetts Street, should be hopping mad,” said David Springe, consumer counsel for the Citizens Utility Ratepayer Board, which objects to the rate shift.

A KCC that should be red-faced about its own internal problems is considering Westar rate hikes that will hammer small businesses and residential customers while lowering rates for large businesses. The increased revenue will allow Westar and Kansas City Power & Light to lock onto about $38 million for improvements at the LaCygne power plant. Westar maintains that the rate shift is being done in fairness to large users who supposedly are paying more than their fair share.

This particular request from Westar is one in a series of approved and pending increases that accelerated starting in 2009. They involved general rates, transmission line rates, environmental rates, energy efficiency rates, a property tax surcharge, “wind costs in fuel charges,” and others. Assuming it’s authorized, along with the other pending requests, typical Lawrence residential customers will see their electric bills go from $123 a month in 2008 to $196 this year.

Written comments will be accepted from the public by the KCC through Sept. 23.

Springe, who contends the rate request is way out of line, is urging consumers to make their concerns known. Hey, it can’t hurt!

Comments

Mike1949 1 year, 5 months ago

What do the people on fixed incomes do? Is Westar going to help those people out, let them die off?

LogicMan 1 year, 5 months ago

Check out the City's annual weatherization program for low income homeowners.

no_thanks 1 year, 5 months ago

Westar continues to milk consumers as coal and natural gas prices are near all time low, yet my bill still reflects high "full surcharges". Coal is purchased on a long term contract so their shouldn't be much variability. Gas is the swing fuel, and either they are extremely poor fuel buyers, or we re getting fleeced. Further, they are guaranteed a minimum Return on Equity, thus they have no incentive to reduce expenses as they will be able to normalize rates, over time, to earn the ROE. It's one of the many challenges of dealing with a monopoly.

Michael LoBurgio 1 year, 5 months ago

Westar Energy says change based on fairness

Looks fair to me if you're not a

Residential Costumer $62 million [increase] or

Small business million $21.5 million [increase]

Proposed rate changes by customer type

Residential: $62 million [increase]

Small business: $21.5 million [increase]

Medium business: $18.5 million decrease

Industrial: $17.4 million decrease

Special contract: $9.7 million decrease

Education: $3.5 million decrease

http://cjonline.com/news/business/2013-07-09/electricity-rate-shift-worries-some-older-kansans

'Americans for Austerity' The new tea party rallying cry.

mikeloburgio 1 year, 5 months ago

Westar Energy says change based on fairness

Looks fair to me if you're not a

Residential Costumer $62 million [increase] or

Small business million $21.5 million [increase]

Proposed rate changes by customer type

Residential: $62 million [increase]

Small business: $21.5 million [increase]

Medium business: $18.5 million decrease

Industrial: $17.4 million decrease

Special contract: $9.7 million decrease

Education: $3.5 million decrease

http://cjonline.com/news/business/2013-07-09/electricity-rate-shift-worries-some-older-kansans

Richard07 1 year, 5 months ago

Of the groups listed above what is each individual groups percentage of consumption relative to total power produced? I certainly don't know. I suppose you could make an argument for one groups proposed increase to be 15% if that group uses approximately 15% of the power generated and represents the same percentage of cost of transmission, etc. If a group represents 50% of power consumed and only gets a 20% increase it wouldn't seem to make much sense.

Michael LoBurgio 1 year, 5 months ago

Westar Energy says change based on fairness

Looks fair to me if you're not a

Residential Costumer $62 million [increase] or

Small business million $21.5 million [increase]

Proposed rate changes by customer type

Residential: $62 million [increase]

Small business: $21.5 million [increase]

Medium business: $18.5 million decrease

Industrial: $17.4 million decrease

Special contract: $9.7 million decrease

Education: $3.5 million decrease

http://cjonline.com/news/business/2013-07-09/electricity-rate-shift-worries-some-older-kansans

Bill Griffith 1 year, 5 months ago

Westar should be blamed for not offering energy efficiency programs for their customers (and receiving a decent rate of return on them) to soften any rate increases. Burning coal is becoming more expensive as society is internalizing its costs rather than allowing our health system to absorb the costs.

jafs 1 year, 5 months ago

Why?

They're not in the business of energy efficiency, they're in the business of providing energy.

And, they're not in the business of "softening" rate increases. They exist to make money.

You're right about the costs of coal, and I don't mind paying more for a dirty energy source - perhaps it'll be an incentive for people to conserve and/or find other options.

But, Westar's rate increase requests are generally a mishmash of things, and this one is no exception. In addition to costs related to EPA regs, they also want to help businesses become "more competitive" and act as a sort of eco-devo function for new businesses. So I support some of this and not all of it.

I called and found out the details, then gave my feedback, which I strongly encourage others to do.

Bill Griffith 1 year, 5 months ago

Energy efficiency is becoming integrated in the business model of utilities across the nation due to its downward effect on rates-but the utility does need to have it structured so make a profit in a timely fashion. You could think of it of providing an energy service not just energy. The problem with a higher energy cost being an incentive for conservation is it ignores the archaic rate mechanisms that do not recognize anything other than centralized, large power plants and the world has moved on to other technologies. As far as "softening" rate increases you missed my point where I stated they still should earn a fair return on their money and while the rate may not necessarily be less, the customer would have access to ee programs offered by the utility which would lower their bill. I hope others give their feedback as you have. Thanks.

jafs 1 year, 5 months ago

Perhaps, but it seems like an odd match to me.

I think that higher energy costs, like higher gas prices, have an immediate effect on conservation efforts - when things cost more, people tend to use less of them. Most Americans can easily cut down on their energy use without spending a dime.

It's my pleasure to give feedback on these sorts of things, and I also hope other people inform themselves and participate in that way.

Bill Griffith 1 year, 5 months ago

Higher gas and electric prices have historically not had a large impact on usage. For example, commercial and business operations rarely change their lighting, heating and cooling, and machinery because of a rate increase. Residential customers will not go out and buy a more efficient fridge, a/c unit, or furnace because of higher rates or probably change their habits of how they light their house. Their tv and clocks will still pulse along as usual. Changes in their heating and cooling decisions have been shown in the past to be more attuned to the weather than utility rates. Gasoline prices are easier to control because you have the foot on the accelerator or brake to control your usage or car pooling can come into play when their are sharper increases. Also, gasoline prices are subject to more price swings than utility rates and that does have a psychological impact on people.

jafs 1 year, 5 months ago

I'm not talking about large investments like that, I'm just talking about using less energy.

For example, one can set the thermostat a degree higher in summer, and a degree lower in winter. Or, turn it way down overnight in the winter. Or, open the windows in spring and fall, and not use the HVAC systems at all.

Businesses could do the same - I'm often surprised at how over-cooled and overheated restaurants are, for example.

When gas prices rise, people travel less - so we now have "staycations".

Bill Griffith 1 year, 5 months ago

I understand you are talking about small conservation steps not energy efficiency programs. However, the ee programs have a far greater impact on saving consumers money than occasional fiddling with the thermostat or opening or shutting a window which depend upon the vagaries of an individual and the cooperation of everyone else in the household. The investor-owned utility system is a socialist system not a capitalist one and does not recognize market forces very well.

jafs 1 year, 5 months ago

Well, we've lived in a variety of houses, with a variety of appliances as far as energy efficiency, and we've always used much less than the average, just by doing what I said.

HVAC systems are the largest energy users, followed by refrigerators. Everything else is pretty minor compared to those.

Yes, the regulated part means they can just raise the rates if people use less energy, but only if the KCC lets them.

imastinker 1 year, 5 months ago

Why is it that "fairness" is being determined as not raising the rates on those with fixed incomes? I see "fairness" as everyone paying the rate that represents the cost to provide that service. For example, rural customers are probably being compensated by urban customers due to lower line losses, lower transformer consumption per kw, and less maintenance per customer on the line.

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