Daily Archives: Jan. 5, 2012

State officials: Westar rate increase proposal way too much

State regulatory staff and consumer advocates are recommending deep cuts in a $90.8 million rate increase requested by Westar Energy.

Analysts for the Kansas Corporation Commission staff are recommending that the proposed increase be reduced to $33.6 million.

The Citizens’ Utility Ratepayer Board, the state agency that advocates for residential and small-business ratepayers, is recommending that instead of any increase, Westar’s rates actually be decreased by $11.6 million.

Both agencies filed testimony today in the ongoing rate case.

A large part of the difference in proposed rate changes relates to the company’s “return on equity,” the financial cushion that Westar gets above its projected cost of providing power to its customers to provide a profit for company shareholders.

While Westar has proposed a 10.6 percent rate of return, KCC staff is recommending 9.5 percent and CURB, 8.85 percent.

A Westar official said the company is evaluating the voluminous testimony filed by the state agencies, but believes its original request was reasonable given the complexities the company faces in retrofitting its coal-fired power plants to meet new environmental requirements.

Company officials have said they think the 10.6 percent return is what they’ll need to entice investors to finance the company.

CURB, however, says the proposed rate is far too high in a time of very low interest rates.

The rate increase request was filed in August and is scheduled to be decided by April 23.