KCC to hold another public hearing on Westar’s proposed rate increase

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03/14/2014 11:28 AM

05/16/2014 10:18 AM

Following a Wichita meeting that drew a largely frustrated crowd of 120, the Kansas Corporation Commission is teeing up another public hearing to allow customers a final chance to address commissioners about Westar Energy’s latest request for an electric rate increase.

The upcoming hearing will be held at the KCC office in Topeka on Thursday, with two-way teleconferencing available for customers to testify from satellite locations in Hutchinson, Salina and Pittsburg, Kan. The meeting will begin at 6 p.m. at all sites.

At issue is a proposal by Westar to raise its rates an aggregate $31.7 million a year to pay for air-quality improvements at the coal-fired La Cygne power plant near the Missouri border 60 miles south of Kansas City.

The plan would raise rates by an estimated $7.50 a month for the average residential customer.

While it is a given that Westar will get money to pay for the plant upgrades, most of the customers who spoke at the Wichita hearing opposed a part of Westar’s plan to rebalance rates between residential and business customers.

That rebalancing would raise prices for home and small-business service 6 to 9 percent while cutting rates for large business consumers and school districts by 6 to 15 percent.

Under the plan, home and small-business customers would get an overall increase in bills of $83.5 million a year, while the big customers’ bills would drop about $50 million.

Westar says its economic models show that the big customers, who are easier to serve because their power use remains fairly steady throughout the year, are paying more than their share of the cost of running the system. Westar vice president Jeff Martin said at the Wichita hearing that rebalancing the rates would get all the customers on the same playing field.

The company’s rate plan is opposed by the Citizens’ Utility Ratepayer Board, a small state agency that represents home and small-business customers.

David Springe, chief consumer counsel for CURB, told the Wichita crowd that the models Westar cites actually tilt the playing field in favor of big business. The models are built around the cost of providing electricity at peak demand, when homeowners and small companies use a lot more power for their summer air conditioning, Springe said.

Also controversial is an economic development plan proposed by Westar that would tap what is now customer money to offer discounts on electricity to new and expanding businesses.

Westar can offer such discounts now – but doesn’t – because of a 2005 case in which the commission decided that the company could fund only 40 percent of its economic development effort from customer funds, with 60 percent coming out of Westar shareholder profits.

Under Westar’s new proposal, funding for economic development would come from the money Westar makes when it generates and sells power to other utility systems. That income is now used to help pay down the company’s fuel bills, which benefits all classes of customers.

The Thursday hearing will follow the same format as the Wichita hearing.

In part one, Westar, CURB and the KCC staff will make informal presentations and answer questions from the audience.

In the second part, customers will be able to make statements directly to the commission. Their comments will become an official part of the case record.

Following this second – and last – public hearing, the commission will hold more courtlike technical hearings in Topeka in which parties to the case can cross-examine each other’s witnesses. A final decision by the commission is expected in December.

Those who can’t get to either hearing will be able to comment by mail, e-mail or phone. For more information on those options, call 800-662-0027 or 785-271-3140.

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