Westar Energy Inc. recently filed a request to increase its rates to recover the cost of providing electric service to its customers with the Kansas Corporation Commission.
TOPEKA — Westar Energy Inc. recently filed a request to increase its rates to recover the cost of providing electric service to its customers with the Kansas Corporation Commission.Westar is seeking an increase in rates of about 15 percent for both its north and south regions.The southern region rates apply to about 310,540 customers in the Wichita area, Arkansas City, El Dorado, Newton, Fort Scott, Pittsburg and Independence, among other towns and rural areas.Westar’s northern region rates apply to about 362,521 customers, including customers in Topeka, Lawrence, Olathe, Leavenworth, Atchison, Manhattan, Salina, Hutchinson, Emporia and Parsons, among other towns in rural areas.The increase in the northern region is $90 million and in the southern region, it is $87.6 million.The combined increase is $177.6 million, and for each region, this reflects an increase of just less than 15 percent.The average residential customer would see a per month increase of $9.62 in Westar’s northern region and $10.34 in Westar’s southern region, based on usage of 900 kilowatt-hours of electricity.The national average retail rate is 9.2 cents per kilowatt-hours. With the requested rate increase, Westar said its average rates will be 6.9 cents per kilowatt-hours.“On a combined basis, our average rates today are lower than they were 20 years ago,” said Bill Moore, Westar’s president and chief executive officer. “This is even more dramatic in our southern area, where our average rates are significantly lower than they were in 1988 — something in stark contrast to other energy costs.”Westar management said the increase relates primarily to investments made in plant and equipment necessary to meet customers’ growing energy needs. “The lion’s share of the increase relates to our investment in new natural gas plants and our commitment to renewable wind energy, plus the costs of restoring our system following last December’s destructive ice storm,” Moore said.“Energy consumption continues to grow among all segments of our customer base,” Moore said. “We also are taking steps to improve air quality by investing in major environmental projects, which are recovered through the environmental charge on our customers’ bills. Our primary goal remains providing safe, reliable, high-quality electric energy service at a reasonable cost to all customers.”Customer demands must be metEarlier this year, Westar outlined its plans to defer construction of a new coal plant for as long as reasonably possible and instead meet growing customer demand through a combination of natural gas generators, wind power and energy efficiency.“Although it is necessary for prices to rise, we are pleased that this requested increase is far lower than it would have been had we embarked on building a new coal plant,” Moore said.Westar’s present rates were last calculated based on 2004 financial data. Westar has since invested more than $1.2 billion for new generating facilities, transmission and distribution lines and new emissions controls for its power plants.Recovering fromDecember’s stormWestar management said a significant driver of the requested rate increase relates to restoring its electrical system following last December’s ice storm. Ice storm restoration efforts cost about $69 million.In an attempt to ease the burden on customers, the Kansas Corporation Commission and Westar typically agree such costs should be spread out and recovered during a number of years.Energy efficiencyis importantEnergy efficiency plays an integral role for Westar and its customers.While efficiency programs create costs, the potential benefit for consumers is one of the most cost-effective and environmentally responsible ways Westar can work together with customers to meet their energy needs, according to a news release“At a time of increasing energy costs, it is critical for our customers to understand and be allowed to choose ways to get the most value from their energy expenditures,” the release stated.Energy efficiency also is an important element of sound environmental stewardship.MeetingenvironmentalstandardsDuring the next three years, Westar management said it must install more than $660 million of additional emission controls at its power plants to meet more stringent environmental regulations.Westar has asked that the costs for these investments in pollution controls be identified separately on customers’ bills so they can clearly see the impact of such environmental laws and regulations.These costs are being recovered through the “Environmental Charge” on customers’ bills and not as part of the rate increase filed today.Westar management said rates in its north and south regions are virtually the same.“We are pleased that we have closed the gap between the former (Kansas Power and Light Company) and (Kansas Gas and Electric Company) rates,” Moore said. “In fact, the rates for the two areas are so close that now might be the best time to combine them into one rate structure.”For that reason, Westar has filed consolidated cost information for the Kansas Corporation Commission’s consideration, asking it to consider consolidating the rates across both regions.Westar’s comprehensive plan can be read online at www.westarenergy.com.