Archive for Wednesday, January 6, 2016

Questions about private conversations with KCC commissioner emerge in utility case

January 6, 2016

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— Kansas City Power and Light filed a new rate-related case with the Kansas Corporation Commission this week, just days after acknowledging company officials had spoken privately with a KCC commissioner to discuss the issue surrounding that case.

Questions are also being raised about whether one or more members of the Citizens Utility Ratepayer Board, the agency that represents consumers in utility rate cases, may have had similar private conversations.

The KCP&L; case involves an issue of discounts allowed during winter months for customers who have electric heating in their homes, what officials call "all-electric customers," and it's an issue that has been simmering for years between KCP&L;, Kansas regulators and CURB.

In a document filed on Jan. 4, KCP&L; officials acknowledged that several weeks earlier, on Nov. 18, KCC Commissioner Pat Apple met with company officials, at the company's request, to discuss the issue of discounts for all-electric customers.

"The topic of conversation centered on Commissioner Apple's concerns regarding KCP&L;'s future treatment of its all-electric customer class and the rate differential between Kansas' electric rates and the rates of its neighboring states," the company stated in its Dec. 31 filing.

The company went on to say the conversation did not include any topics that were set for hearing or awaiting a commission decision, saying it was filing the notice anyway, "out of an abundance of caution."

Near the same time period, KCP&L; filed a new rate request was made that would effectively restore a large portion of those discounts that the KCC had slashed in a 2012 rate case.

Apple is a former state senator who chaired the Senate Utilities Committee before he was named to the KCC. During his time as chairman, he held hearings on the issue of discounts and strongly opposed efforts to reduce or repeal them.

Those filings were the subject of a heated discussion Wednesday when three of the four board members of CURB met in a conference call.

The three CURB members present agreed to file a motion to intervene in the new case.

Niki Christopher, CURB's interim consumer counsel, said she had received information that similar conversations may have taken place between Apple and some CURB members. She asked that any board member who had engaged in such a discussion notify her by email, and she would call for a closed-door executive session to discuss the matter at a later meeting.

Such "ex-parte" conversations at the court-like KCC are considered improper if they involve matters before the commission because other parties in the case do not have the same opportunity to hear what is being discussed and participate.

But CURB chairwoman Ellen Janoski of Wichita took exception to Christopher's suggestion that board members may have behaved improperly, and called on Christopher to identify where she had heard that CURB members may have had ex-parte communications.

"We’re all above board here," Janoski said. "I don’t understand why that was brought up. ... It seems like an accusation like that needs to have some weight behind it."

Christopher, however, declined to identify her source publicly, but said the issue was about Apple's behavior, not the board's.

The two other board members present on the conference call, Bob Kovar of Osawatomie and Bob Hall of Hutchinson, both denied they had had any such conversations. Board member James Mullin, II, of Shawnee, was not present for the meeting.

The discounts were put in place in the 1980s, shortly after the Wolf Creek nuclear power plat went online, as a way of encouraging electric use in order to soak up much of the excess capacity that plant generated.

Originally, all-electric residential customers were given discounts ranging from 37 percent to 51 percent for their winter electricity use, depending on how much they used.

But in 2012, while Apple was still in the Senate, the KCC slashed those discounts by more than half. That was because KCP&L; had just built a new coal-fired power plant, indicating that excess capacity from Wolf Creek was no longer an issue.

Both Apple and CURB had argued for a more gradual phase-down of the discounts.

During another rate case in 2015, CURB called for revisiting the issue of the all-electric discounts, but KCP&L; opposed the idea at that time. In a 2-1 vote, the KCC rejected CURB's position. KCP&L; is now appealing other parts of that 2015 rate case to the Kansas Court of Appeals.

Stacey Harden, an economist and analyst for CURB, noted that the new proposal by KCP&L; is not the same as the one CURB had supported earlier. It calls for leaving the current rate and discount structure in place, but giving all-electric customers a credit at the end of the winter cycle, which would be applied to future bills, to refund a portion of the higher rates.

Those discounts would be phased down over the next five years. KCP&L; is proposing to recover the cost of those credits through higher rates on its other residential customers.

Harden noted that there are no documents in KCP&L;'s filing to demonstrate how much those credits would cost over five years, or what the rate impact would be on the other customers.

She said the all-electric customers make up about 19.5 percent of KCP&L;'s residential customer base, while those who heat with natural gas or other sources make up the other 80.5 percent.

Editor's Note: This article has been changed to correct the dates on which KCP&L; filed documents with the KCC.

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