TOPEKA, Kan. (KSNT) – We’ve got your back with news that your electric bill could go up if Westar Energy gets its way beginning April 1.
Just last fall the Kansas Corporation Commission which oversees utilities approved a rate increase of $78 million dollars annually for the power company. That amounts to an extra $5-7 a month starting last November. Westar said the hike will cover costs to improvements at power plants. The utility had originally requested $158 million but cut that amount nearly in half after public outcry.
Now, Westar is back with another request: raise the rates for residential customers and schools but cut the costs for most businesses. A rate request filed with state regulators seeks to increase the transmission delivery charge tariff on residential customers’ bills by about 31%. The changes would add another $4 a month to the average customer’s bill. The utility’s filing shows they are requesting that it take effect April 1st.
The request was filed with the Director of Utilities for the Kansas Corporation Commission back on February 15th. For their part, there appears to be no mention of the rate increase on the company’s news release page or their social media accounts. Currently, on the Kansas Corporation Commission’s website, there is not yet anything listed under the scheduled hearings section or testimony or briefs.
The filing to raise the transmission delivery charge came a little over a week before the energy company announced their 2015 earnings, $21 million less than the previous year. In a news release, the company blamed the lower profits on several things but specifically cited a “$14 million customer refund obligation for transmission revenues.”
Last June Westar settled with the Kansas Corporation Commission over allegations the company was over-earning on its transmission investments. Westar agreed to refund $10 million to Kansas customers and reduce rates by approximately $8 million per year. At the time, the Commission announced that customers would save about $50 million over the next five years. They anticipated that customers would begin to see the savings on last month’s bill (February 2016) The Kansas Corporation Commission had filed a complaint with the Federal Energy Regulatory Commission in which it objected to Westar’s 11.3% Return on Equity on transmission line rates. The KCC claimed they were unreasonably high.
While the company only made investors $2.11 per share last year, they are projecting earnings of $238-$2.53 per share for 2016. Westar Energy, Inc. is the state’s largest electric utility, providing electric service to nearly 700,000 customers using coal, wind, uranium, natural gas, and landfill gas.
Westar will pay the costs associated with the Corporation Commission’s staff and the investigation to determine the need for the transmission delivery charge increase. Two members of the commission’s utility staff and an attorney from their legal division have been assigned to the case.
Meanwhile, a petition to intervene was filed by OxyChem, a company with facilities in Wichita, of which the company claims to be Westar Energy’s largest corporate customer. In their petition, the company claims to use an elctro-chemical process to produce chlorine, a process they say is costly for the company. As such, they claim that Westar Energy’s proposed tariff would hurt their bottom line. OxyChem notes that they would be impacted by the added transmission tax. The company requested documents related to Westar’s filing and asked that they be allowed to intervene in the case and participate in future “aspects of this docket”. Permission for OxyChem to intervene and participate in the process was granted March 10 by the Corporation Commission.
According to Westar, the electric company is the largest power provider in Kansas, serving approximately 687,000 customers. The majority are in the east and east-central part of the state. Their website claims the company is dedicated to “providing quality service at below average prices.” The Topeka-based company employees about 2,400 people in the Sunflower State. Westar is responsible for 34,000 miles of transmission and distribution lines.