Archive for Wednesday, July 22, 2015

Kansas firm criticized for plan to hike electric rates $152 million

July 22, 2015

— A proposal by Kansas' largest electric utility to raise its rates by $152 million a year is drawing strong criticism, particularly from green-energy advocates who argue that part of the plan will discourage consumers from installing solar panels or taking other steps to conserve power.

The Kansas Corporation Commission, which sets electric rates, had its first public hearing Tuesday in Topeka on the proposal from Westar Energy Inc. The commission is having a second hearing Thursday at Wichita State University, with remote links from sites in Hutchinson and Pittsburg.

Westar has said it needs the rate increases to cover costs already incurred for improvements mandated by federal air pollution standards, primarily at a plant near LaCygne in eastern Kansas, and for upgrades at the Wolf Creek nuclear power plant outside Burlington.

The company has said its rates would rise by an average of 7.9 percent for all of its 700,000 customers, though the increase would average 12.1 percent for its 600,000 residential customers. Westar expects residential customers' bills to increase between $9 and $13 a month.

But AARP Kansas is calling the rate increase unreasonable and urging its members to protest, and the Citizens' Utility Ratepayers Board, a state agency representing residential customers and small business owners, is urging the KCC to limit the total increase to about $50 million.

"We are tired of these constant and continual surcharges and increases," said David Springe, CURB's consumer counsel.

Westar's proposal includes a plan to increase its basic monthly residential service charge from $12 to $15 this year, then to $27 by October 2019.

"Many of the costs it takes to deliver electricity to your home are the same regardless of how much electricity you use," said Jeff Martin, the utility's vice president of regulatory affairs. "The current pricing structure does not reflect the fixed costs required to serve each household."

Westar is also proposing to change special rates for customers who install solar panels, giving them a choice in the future of paying a higher monthly service charge or an additional charge based on their peak electric use. The company has said the 300 customers with existing solar panels would not be affected and the changes will ensure that solar users will pay their fair share for Westar's system.

But green energy advocates say that with the changes, Westar will eliminate incentives to install solar panels — and kill the industry in Kansas. And they said increasing the basic monthly service charge will discourage conservation generally.

"Any effort and money you have put into conserving energy and saving on your energy bill is going to be penalized by the new Westar rate plans," said Sharon Ashworth of the Kansas Natural Resources Council.

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