Eagle editorial: Scrutinize gas rate hike

08/21/2012 12:00 AM

08/08/2014 10:11 AM

Kansas Gas Service’s 632,000 ratepayers need to be able to count on the Kansas Corporation Commission to consider their interests as it scrutinizes proposals such as the company’s latest plan to raise rates $32.7 million. No rubber-stamping, please.

As a hearing last week in Wichita made clear, the rate case is stirring up customers and raising questions of fairness. And no wonder.

Why shouldn’t residential customers be irked at the idea of paying about 9.1 percent more as large commercial users pay an average of 8.2 percent less and some unnamed users pay 20 percent less? Meanwhile, small businesses would pay 2.5 percent more.

As the economy continues to struggle to its feet, the 10.75 percent rate of return on equity that Kansas Gas seeks for its investors also strikes many customers as excessive.

And if Kansas’ regulatory system can’t find fault with the company’s “revenue normalization adjustment” plan to charge more annually because customers are conserving energy and using less natural gas, that’s a problem not just for customers but for the state and its future.

According to the Citizens’ Utility Ratepayer Board, Kansas Gas’ proposal would provide the company with a 20.5 percent increase in the revenue it collects for delivering gas to consumers. Such a steep rate of increase seems out of step with Kansas Gas president Brad Dixon’s talk of the normalization plan as “maintaining an adequate level of revenue for us.”

As Michael Stavy, a Chicago-based energy economist, suggested to The Eagle’s Dion Lefler, it would make more sense for Kansas Gas to go with a small fixed charge and raise the part of its rates based on usage.

As the Kansas Gas case advances to a final decision in January, more ratepayers should make themselves heard. Comments can be submitted until Oct. 31 by mail (Kansas Corporation Commission, Office of Public Affairs and Consumer Protection, 1500 S.W. Arrowhead Road, Topeka, KS 66604-4027), by e-mail (public.affairs@kcc.ks.gov) or by phone (800-662-0027). To avoid confusion, refer to Docket No. 12-KGSG-835-RTS.

Unfortunately, doubts about the KCC’s willingness to look out for residential and small-business consumers were deepened by another case decided in April. That’s when the KCC approved a settlement – agreed upon by Westar Energy, KCC staff and large commercial and industrial consumers – looking to small ratepayers to shoulder most of a $50 million rate hike and a 10 percent shareholder profit.

“The KCC has become a cash register for the utilities,” David Springe, CURB’s chief consumer counsel, said at the time.

This time and every time, the commission must do more than go through the motions of vetting rate cases on the way to giving utilities whatever they want. And the KCC and other state leaders need to do more to see that energy conservation is encouraged, not punished with rate hikes.

For the editorial board, Rhonda Holman

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