Editorial: Oppose Westar rate increases
Electric utility’s proposal to raise prices for consumers is neither fair nor environmentally sound.
Advocacy groups are right to oppose rate hikes sought by Westar Energy.
The Citizens Utility Ratepayer Board, or CURB, a state agency that represents consumers in utility rate cases, and staff members from the Kansas Corporation Commission filed testimony last week asking the KCC to reject Westar’s request for a $17.2 million rate increase. Instead, the groups believe Westar should cut rates for Kansas customers by anywhere from $69 million to $125 million.
“CURB’s evidence strongly supports the need to decrease rates for all Westar customers and we hope the KCC will adopt our recommendations in this rate case,” CURB consumer counsel David Nickel said in a statement.
Westar provides service to about 700,000 customers in Kansas, including Lawrence. It is the state’s largest electric utility.
In February, the company filed a rate request seeking a rate cut of $1.6 million in September before increasing rates by $54 million in February 2019. But KCC has since approved the merger between Westar and Great Plains Energy, parent of Kansas City Power & Light. Westar said the merger will produce savings and adjusted its rate hike request to $17.2 million overall.
Over time, the rate hike will help the company recover the cost of developing the new $400 million Western Plains wind farm in southwest Kansas, Westar said.
The proposed rate hike would cost Westar customers an average of $2.80 per month.
Both the KCC staff and CURB argued that Westar should not be allowed to recover costs associated with the Western Plains wind farm. “Westar acknowledges that this investment is not necessary to provide service to Westar’s customers,” Nickel said. “Therefore, CURB believes it unfair to saddle the ratepayer with the risk of the investment.”
In addition, both KCC staff and CURB are recommending smaller fees than Westar is proposing for customers who use solar panels and other self-generation systems.
For customers with self-installed solar panels, Westar wants to charge 7.2 cents per kilowatt hour of energy used as compared to 5.6 cents for regular customers. Westar also has proposed a demand charge on solar customers in which the customers would pay an extra charge on the highest hour of usage between 2 and 7 p.m. This charge could add $25 to $35 per month to solar customers’ bills.
Westar argues the fees are needed for residents with their own solar because those customers still use the company’s power distribution grid but buy a lot less electricity.
Westar’s rationale for the rate hikes is misguided. If the Western Plains wind farm couldn’t produce a return on investment without a customer rate hike, then Westar shouldn’t have made it. And it’s disheartening to see the company propose rate policies that punish those who have invested heavily in energy efficiency, such as homeowners who have installed solar panels.
The KCC’s mission is to regulate rates to ensure fairness and to promote energy conservation and efficiency. Westar’s rate hike proposals don’t pass muster on either.