KCC approves rate cut for Westar customers, but solar panel users won’t get same benefit

photo by: Thad Allender

Power lines bisect the skyline at the Westar Energy plant in Lawrence in this file photo from June 2007.

Story last updated at 1:18 p.m., Sept. 27

TOPEKA — Kansas utility regulators on Thursday approved a new rate structure for customers of Westar Energy that will, on average, lower monthly electric bills for most residential customers by about $3.80 a month.

In addition, as part of a settlement agreement approved by the Kansas Corporation Commission, starting early next year, customers will begin seeing credits on their bills that reflect savings the company will realize as a result of recently enacted federal tax cuts.

But not all residential customers will share equally in those rate cuts. That’s because, as part of the settlement, customers who have installed rooftop solar systems or other kinds of self-generating devices will be charged additional fees that Westar says are needed so those customers pay their fair share of maintaining the power grid.

Westar spokeswoman Gina Penzig said that, under the new rate structure, there will still be financial benefits for installing solar energy systems.

“Based on overall estimates, customers could still potentially see about a 30-percent decrease when they install solar, so there’s still potential for savings under these new rates, just not quite the sweetheart deal that they’d had before,” Penzig said in an interview.

Westar and other utilities have argued for years that customers who use solar energy and other kinds of “distributed generation” systems do not pay their fair share of the cost of maintaining the power grid to which they are still connected. In 2015, the KCC issued a general order saying utility companies could implement new rate designs for those customers to reflect the true cost of keeping them connected.

But Aron Cromwell, owner of Cromwell Solar in Lawrence, a company that installs solar energy systems, flatly rejects that idea.

“It’s an absurd notion that has not been proven. In fact the opposite has been proven time and time again,” Cromwell said in an interview. “When solar has had an opportunity to have a fair, third-party, unbiased study of the benefits and costs of solar to the general ratepayer, time and time again in different jurisdictions across the country, they have found that solar is a net benefit and not a cost.”

Cromwell, a former Lawrence city commissioner and mayor whose company has been in business since 1982 and now has 50 full-time employees, said the solar industry in Kansas has already absorbed the impact of the KCC’s decision because residential customers have known it was coming since 2015.

As a result of the decision, he said his company now focuses more heavily on installing solar systems for commercial buildings, although it does still do some residential projects.

The KCC approved the new rate design Thursday after months of deliberations.

On Feb. 1, Westar filed a request seeking a $52.6 million rate increase, which would have added about $5.90 a month to the average monthly residential bill.

Westar said at the time that the higher rates were needed to account for higher costs it expected to incur in the future as certain renewable tax credits expire and a new wind farm in western Kansas comes online.

But staff at the KCC, as well as the Citizens Utility Ratepayer Board, a state agency that represents consumers in utility rate cases, both objected to that, arguing that had overstated those projected costs.

They also argued that the Western Plains wind farm in southwest Kansas was not needed for serving Westar customers.

And while they agreed that Westar was justified in seeking a new rate design for solar customers, they also argued that the fee structure Westar had proposed was excessive.

Those factors, combined with the expected savings Westar will realize from the federal tax cuts and its recent merger with Kansas City Power & Light, added up to justification for an overall rate cut.

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