Wichita public hearing on gas rate increase set for Thursday

08/13/2012 5:00 AM

08/13/2012 8:43 PM

Wichitans will get their chance this week to weigh in on a proposal by Kansas Gas Service to raise rates for residential and small-business customers and reduce rates for bigger businesses.

Kansas Corporation Commission members will come to Wichita on Thursday to hold a public hearing on the gas company’s request for a $32.7 million overall rate increase. The hearing will begin at 6 p.m. at the Wichita Central Library, 223 S. Main.

If approved, the new rates would add about $5.68 a month to the average home customer’s gas bill, according to the company. Customers will pay more in fixed monthly charges and their bills will be less dependent on how much gas they actually use.

Small mom-and-pop-type businesses would see about a 2.5 percent increase in their overall gas bills, according to the gas company.

Medium commercial customers would see their bills go down an average of 3.9 percent and large businesses would get an average reduction of 8.2 percent.

Some customer classes would receive as much as a 20 percent bill reduction, according to the commission’s notice of the public hearing. The agency could not immediately provide information on what type of customers would see that level of reduction.

The Citizens Utility Ratepayer Board, a state consumer agency, is battling to reduce the increase for the home and small business customers that the board represents.

“I think this particular request is very unbalanced,” said David Springe, chief consumer counsel for CURB. “It seems to me everybody is getting a pretty good deal except residential and small-business customers.”

Dawn Ewing, a spokeswoman for KGS, said commercial customers already pay “significantly more” for service than residential customers, although it costs about the same to serve both.

In addition to seeking an additional $32.7 million through rates, the gas company is requesting “revenue normalization,” which is in essence an income guarantee that would allow the company to raise rates if customers buy less gas. KGS is seeking a 10.75 percent rate of return on equity, the part of its income that provides for a profit for its shareholders.

Springe said with the revenue guarantee “KGS is asking ratepayers to provide them 10.75 percent risk-free. Absurd.”

Ewing said the company does not consider revenue normalization to be a profit guarantee.

“The company will still be at risk for increases in general operating costs,” she said.

The rate proposal being considered by the commission is for the price of service only and does not include the cost that customers will pay for the actual natural gas that they use. The cost of gas is a separate charge on customer bills and fluctuates with the price KGS pays for the gas.

Thursday’s public hearing will be done in two parts.

During the first part, gas company officials, commission staff and a lawyer from CURB will make informal presentations and answer questions about the rate proposal.

In the second half of the meeting, customers will have the opportunity to make comments directly to the commissioners, who will make the final decision. Those comments will be part of the official record in the rate case.

In November, the commission is scheduled to hold four days of court-like technical hearings at its Topeka office and a final decision on the rate request is due by Jan. 14.

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