Kansas regulators filed a complaint Wednesday with the Federal Energy Regulatory Commission against Westar Energy, Inc., alleging the state’s largest utility is charging unjust and unreasonable electric transmission rates.
The Kansas Corporation Commission is objecting in its filing to what it called Westar’s unreasonably high return on equity in a formula that sets in its transmission rates. The agency contends the company’s 11.3 percent rate on equity results is unreasonably high and should be only 9.37 percent.
KCC said in a news release that prior to filing the complaint it approached Westar and requested it voluntarily reduce it, but those discussions failed and necessitated the filing.
“Though transmission service reflects a small portion of total utility cost, it is a cornerstone on which our state’s reliability, access to low-cost power and renewable energy rest,” said Mark Ruelle, Westar Energy’s president and chief executive.
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Westar contends the KCC’s action could cause Kansas to underinvest in critical high-voltage transmission infrastructure.
“We appreciate the role the KCC has in balancing the public interest, but in this matter we just have to agree to disagree,” Ruelle said in a news release. “We trust the process FERC has to review such concerns.”
The company argued that FERC put rules in place a decade ago to attract investment in the nation’s high-voltage power grid because development had stagnated.
KCC contends that Westar’s rates could be cut $15.8 million annually if the state prevails, and that based on anticipated utility growth that figure is expected to about double over the next five years.
Westar Energy provides electric service to nearly 700,000 customers.