KCC ruling excludes consumer group from Westar rate talks

08/30/2013 6:22 PM

08/06/2014 8:37 AM

Consumers may not have a seat at the table when state regulators consider $10.5 million in Westar Energy rates to pay for energy-saving thermostats for homeowners and multimillion-dollar rate rebates for a Wichita chemical plant.

A Kansas Corporation Commission official has ruled that the Citizens’ Utility Ratepayer Board cannot intervene in the ongoing case in which Westar is seeking to recover what it spent on energy efficiency programs over the past year.

It marks the first time that CURB – the state agency that represents residential and small-business customers – has been shut out from participating in such proceedings, said David Springe, CURB chief consumer counsel.

The KCC prehearing officer, Brian Fedotin, ruled that CURB hadn’t shown that its participation is necessary to ensure that small consumers’ interests will be adequately represented.

CURB has appealed the ruling, arguing that the state law that created the consumer agency grants it an automatic right to participate in any proceeding affecting a state-regulated utility’s rates.

“If we’re not there, the only parties (in the case) will be Westar and the KCC staff,” Springe said. “There wouldn’t be anybody there to represent consumers.”

Of the commission’s denial, he said, “Apparently there’s some magic words they want to hear and we don’t know what they are.”

At issue is Westar’s “Energy Efficiency Rider,” a state Legislature-approved add-on to the base rates that the utility receives to fund company operations and shareholder profits.

Last year, Westar asked for and received nearly $11.9 million through the rider, costing the average ratepayer about 54 cents a month. This year, the company is requesting less, and the average cost to the customer would be about 48 cents a month.

About $6.3 million from the energy rider went to Westar’s program of providing advanced thermostats allowing the company to cycle customers’ air-conditioner compressors off and on during peak summer heat.

Another $4 million from the efficiency rider goes to Westar’s largest retail electricity customer, the Occidental Chemical Corp. plant on South Ridge Road in west Wichita.

Westar pays the chemical company a bill credit of $300,000 to $370,000 a month in exchange for the right to interrupt its power on short notice during peak usage periods.

Although Westar has never curtailed Occidental’s power and would do so only as a last resort, having the right to do it means the company can save money by not having to build an additional generating plant to assure Occidental uninterrupted service.

Springe acknowledged that the numbers are not large, but he said it’s important for the utility’s consumers to have a voice in all rate proceedings.

He said that while riders aren’t usually controversial, they do need to be reviewed to ensure Westar is spending customer money prudently.

“I like to have our people take a look at it just to see if anything jumps out at us,” he said.

Commission spokesman Jesse Borjon declined to comment on the denial because CURB has filed for reconsideration. He referred to the written order issued by Fedotin.

In that order, Fedotin ruled that CURB had not complied with commission policy set in an earlier case that requires intevenors to provide “a more detailed demonstration of their interests and an explanation of why those interests are not properly represented by other parties.”

“The commission finds the simple recitation of boilerplate language in CURB’s petition to intervene does not satisfy the standards for intervention,” Fedotin wrote.

He also wrote that CURB’s filing “does not demonstrate a particular interest that is not represented by the other parties affected by the proceeding or identify the specific relief sought by intervention.”

Springe said that Westar represents its own interests and that while the KCC staff can investigate and evaluate rate requests on behalf of the general public, it doesn’t specifically represent small consumers and is prohibited from appealing commission decisions to court.

Fedotin’s ruling “erroneously interprets and applies the law” and “constitutes an unlawful procedure or failure to follow prescribed procedure,” Springe said in his filing requesting reconsideration.

Further, Springe said, if boilerplate language is the problem, the commission is as guilty of that as anyone.

He cited an earlier Westar case to show that Fedotin used boilerplate language in the part of his order that criticized CURB for using boilerplate language.

Springe added that changing the wording doesn’t change the underlying facts.

“Rephrasing those same facts simply because the commission does not like the use of standard language would cause completely unnecessary rate case expense with no resulting legal consequence,” he added.

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