Westar to explain rate request at public hearing Tuesday
Would result in higher utility bills, especially for those with solar panels
TOPEKA — Customers of Westar Energy could soon be paying higher rates for electricity, especially if they have solar panels or other renewable energy devices attached to their homes.
The Kansas Corporation Commission will conduct a public hearing Tuesday in Topeka to take public comment on the company’s proposed new rate structure, which Westar officials describe as an effort to encourage customers to control how much electricity they use during peak demand periods.
Customers who do not have solar panels or other forms of “distributed generation” would have the option of taking part in that program or not, depending on whether it would save them money. But their rates would be likely to go up under either scenario.
But people who have those devices would be required to take part, and their bills could go up substantially.
“It is a peak efficiency rate and it is aimed to reward customers who are able to curb their energy use and their demand on the power grid during the times of highest demand,” Westar spokeswoman Gina Penzig said in an interview.
“Between 2 and 7 p.m. on weekdays is when we see our system peak,” she said. “That’s when we have to have enough transformers, wires, etc., on the ground to make sure our customers’ needs are met.
The KCC has previously said utilities may charge additional fees for people who generate some of their own power because under traditional rate structures, those customers do not pay their fair share of the cost of maintaining the power grid, which they still rely on to some extent.
Under a traditional rate plan, customers pay a flat monthly fee just to be connected to the grid, and then additional amounts for each kilowatt-hour of electricity they use.
Starting next spring, Westar is proposing that for customers who stay in that traditional plan and who use less than 900 kWh per month — which describes about two-thirds of its residential customers — their energy usage charge would go up by about $6 per month or less.
But for people who use solar panels or other distributed generators, there would be a more complicated three-part rate structure.
They would still pay the basic service charge plus the charge for the amount of energy they use, and the charge for that energy would be slightly less than for traditional customers.
But then they would also pay an additional fee based on the maximum amount of energy they use in any given hour during that peak demand period from 2 to 7 p.m. on weekdays.
The company would look at the “average kilowatt load during the 60-minute period of maximum use that occurs in the demand billing period during the month,” and multiply that by $9.45 per kilowatt during the summer months of June through September, and $3.15 per kilowatt during all other months.
“So if you came into the house and turned several large appliances on at one time, that would probably set your demand charge,” Penzig said. “But, if instead, you maybe work a shift and you’re not home, or maybe you’re modest in how you use your air conditioning, and you plan a little bit and you push the laundry and dishwashing off until after 7 p.m., you might lower your demand during that time period.”
Even with that additional charge, Penzig said, the company estimates that people with solar panels would still be paying about 30 percent less on their utility bills than they would pay without those devices. But she said under the current rate structure, some of those customers are paying too little today.
“Right now we have some solar customers who all they pay is the basic service fee,” she said.
The concept of charging additional fees for customers with solar panels has sparked opposition from renewable energy advocates, and from makers of solar panels, such as Lawrence-based Cromwell Solar.
In addition to the rate increases the company is seeking to implement next spring, Westar is also proposing a rate cut to take effect in September that would reflect some of the savings the company will realize due to recent cuts in federal corporate tax rates.
The net effect of the two adjustments, she said, would be to increase Westar’s revenues by about $52.6 million a year.
However, she said, that could be reduced substantially if the Kansas Corporation Commission approves Westar’s proposed merger with Great Plains Energy, the parent company of Kansas City Power and Light.
As part of a settlement that was reached as part of the review process for that merger, she said, the companies have agreed to reduce revenues by $37 million, reflecting not only the corporate tax savings but also the savings and efficiencies that would result from the merger.
That would make the net effect of all rate adjustments, including those associated with the merger, to $17.6 million in additional revenue, Penzig said.
The KCC is scheduled to issue its decision on the proposed merger June 5.
Tuesday’s public hearing is scheduled to begin at 6 p.m. at the Washburn Institute of Technology, 5724 SW Huntoon, in Topeka. The hearing will also be livestreamed on the Kansas Corporation Commission’s website, kcc.ks.gov.
That website also has a link entitled “Your Opinion Matters,” which people can use to submit written comments. Or they can send comments to the KCC by mail to the agency’s Office of Public Affairs and Consumer Protection, 1500 SW Arrowhead Road, Topeka, KS, 66604-4027. People sending written comments should reference Docket No. 18‑WSEE‑328-RTS.