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Westar, school districts still negotiating over rate settlement

  • The Wichita Eagle
  • Published Tuesday, Sep. 24, 2013, at 7:45 p.m.
  • Updated Tuesday, Sep. 24, 2013, at 7:45 p.m.

Although a settlement has been reached with most of the parties in a $30.7 million Westar Energy rate case, negotiations continue with school districts to try to get them on board, a Westar official said Tuesday.

Jeffrey Martin, Westar’s director of regulatory affairs, said he thinks the company and school districts that intervened in the case will be able to reach accord before a scheduled hearing on the rate proposal Thursday.

After that hearing, members of the Kansas Corporation Commission will decide whether to approve, modify or reject the settlement.

“At this point, I don’t believe anybody will file in opposition to the settlement,” Martin said.

On Monday, most of the key players in the rate case agreed on the settlement, which gives Westar an additional $30.7 million in annual rates and raises home customers’ bills $3 a month.

School districts – including the Wichita school district – made up the only group that did not sign on with the settlement or at least agree not to oppose it.

Under Westar’s original rate proposal, schools would have gotten a $3.6 million rate decrease. In the settlement, schools would get a $500,000 rate increase.

Schools would have gotten a rate break in the original proposal as part of a Westar plan to “rebalance” rates between residential and business customer classes.

The company had proposed to shift about $50 million in rates from large commercial and industrial customers to residential and small-business consumers.

That plan was pared way back in the settlement.

Martin said Westar accepted a smaller rate shift than it wanted in the interest of compromising to reach a settlement.

The case at hand is an “abbreviated” proceeding called mainly to deal with unfinished business after a rate case last year that granted Westar a $50 million increase.

Westar also backed away from plans to use money from power sales to other utilities to fund discounts for new and expanding businesses and to assist low-income consumers with paying their bills.

On that issue, Westar bowed to opponents, including the KCC staff and the Citizens’ Utility Ratepayer Board, who argued it should not be part of the current case.

“We felt it was probably not going to come to a settlement unless we took those (proposals) off the table,” Martin said.

CURB, the state agency representing residential and small-business customers, called the settlement a partial win.

Although those consumers will pay about $9.5 million more in rates than CURB thought they should, they’re also avoiding the risk of losing the case and having to pay $50 million more than they are now, said David Springe, chief consumer counsel.

If the commission approves the settlement, residential customers will pay $18 million more for power. The increase will push the basic service charge up from $9 a month to $12 a month.

Small businesses will pay $12.7 million more, about a 3.5 percent increase overall.

Rates for medium-size businesses will go up $3.9 million, large industrial customers will pay $3.2 million more, cities and other street lighting customers $2.1 million and school districts $500,000.

Only one company in the state will see a significant decrease in electric rates: the Occidental Chemical plant in south Wichita, Westar’s largest customer. Occidental has a special contract with Westar approved by the commission.

Reach Dion Lefler at 316-268-6527 or dlefler@wichitaeagle.com.

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