Archive for Thursday, August 6, 2015

Westar electric rates would rise $78M under deal

August 6, 2015, 5:49 p.m. Updated August 7, 2015, 8:41 a.m.

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Kansas' largest electric company reached an agreement Thursday with a consumer advocacy agency and other parties to scale back a proposed rate increase and postpone changes in charges for customers who install solar panels.

Topeka-based Westar Energy Inc. had sought to increase its rates to bring in an extra $152 million a year, but agreed instead to an increase of only $78 million. Both the staff of the rate-setting Kansas Corporation Commission and the Citizens' Utility Ratepayers Board, which represents residential customers and small businesses, initially wanted an increase of less than $56 million.

The utility said that under the agreement, most households would see their electric bills rise between $5 and $7 a month. Westar has nearly 700,000 customers in Kansas.

The deal involves all parties in Westar's rate case before the KCC. The three-member commission still must sign off, and state law gives it until late October to decide.

Westar had said it needs to impose higher electric rates to cover costs already incurred for improvements mandated by federal air pollution standards, primarily at a plant near LaCygne in eastern Kansas, and for upgrades at the Wolf Creek nuclear power plant outside Burlington. The utility also planned to spend $220 million over five years to upgrade its electrical grid.

Westar CEO Mark Ruelle said the agreement still will allow the company to make "limited investments" in its grid. The company estimated those investments at $50 million.

"We understand the need to have a balanced, constructive approach to regulating our business, yet still allow us to provide clean, reliable, safe and cost-effective critical service for our customers," Ruelle said in a statement.

David Springe, the consumer board's chief attorney, said the agreement is "a pretty decent deal" because Westar would have been allowed to boost its rates to recover the cost of power plant improvements anyway.

"There's not an awful lot of room over and above that," Springe said.

Westar had proposed increasing its basic monthly residential service charge from $12 to $15 this year, then to $27 by October 2019. Under the agreement, the charge would increase to $14.50 and stay there for at least a few years.

The agreement also postpones a decision on Westar's proposal to revise special rates for customers who install solar panels. The company wanted to give them a choice in the future of paying a higher monthly service charge or an additional charge based on their peak electric use.

The company said the 300 customers with existing solar panels would not be affected and the changes would ensure that solar users pay their fair share for Westar's system. But green energy advocates said the changes would eliminate incentives to install solar panels and kill the solar industry in Kansas.

Under the agreement, the KCC would consider such issues in a separate case later.

Comments

Aaron McGrogor 2 years, 3 months ago

I think they should be required to provide better than sub-par service for at least a year before getting any more money.

Jake Dale 2 years, 3 months ago

I wonder if this $78M rate hike is needed to offset the $38M they're going to "pay us back" for overcharging last year?

Ken Lassman 2 years, 3 months ago

Does anyone know how much their CEO is paid? Seems like I saw something like $2.5 million/year. And has anyone asked how the $39 million payoff of their former CEO Wittig affected their ability to invest in their production and distribution capabilities? Or whether there is a firewall between customer bills and paying off that fiasco?

Furthermore, if this is primarily to help pay off LaCygne and Wolf Creek, why do folks with solar panels have to pay it in their base? Seems to me if Westar wanted to look to the future, they'd incentivize such folks as well as wind by making them just pay for the electricity they use instead of charging a base rate that makes them pay regardless of how much or little they use. I'm glad that they have submitted a revised proposal that reduces that amount, but it's still too much if they want their grid away from coal to a more renewable mix. Providing incentives is a time honored way of letting the market make the needed shifts; providing disincentives is a time honored way of slowing the transition/protecting the status quo.

Richard Heckler 2 years, 3 months ago

Westar would be more efficient if Westar would eliminate the CEO,the BOD's, other top level management staff,campaign contributions and lobbyists. Put that money back into the company and reduce rates.

If Westar is listed on Wall Street pull it off ASAP.

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