Maybe Westar Energy will be able to justify its latest rate-hike proposal to the Kansas Corporation Commission as a smart and essential business move, but it’s terrible public relations to raise rates on individuals in order to give a break to big commercial users.
The upset customers who spoke at last week’s public hearing in Wichita pointed out the main problem with the request, a net increase of $31.7 million a year that would fund air-quality upgrades at Westar’s coal-fired La Cygne power plant south of Kansas City: Westar wants residential users and small businesses to pay 6 to 9 percent higher rates while reducing rates by 6 to 15 percent on large businesses and school districts.
If that’s a “rebalancing,” it’s an unbalanced and unfair one.
The estimated $7.50 a month more faced by the average residential user seems even less defensible given the context of Westar’s 19 requested rate increases in the past four years for almost $470 million total.
Incremental hikes can add up to serious hardship over time, and unlike businesses, residential users can’t pass them onto anybody else. David Springe, consumer counsel for the Citizens’ Utility Ratepayer Board, notes that residential electric rates are higher in Kansas than in many nearby states, including Oklahoma and Texas.
And people seem skeptical of Westar’s contention that cost analyses reveal big commercial and industrial users, unlike residential and small-businesses customers, pay more than it costs to provide them service. Springe says Westar’s model weights costs toward peak power usage, and that an evaluation of overall usage finds the current rate balance between small and large consumers is about right.
Customer Ulysses S. Beasley said at the Wichita hearing: “Walmart and Boeing and all those people … they’re making money off your juice. The residents don’t make anything.”
Westar customers should continue to weigh in on the case, either via a final public hearing at 6 p.m. Thursday in Topeka that will have teleconference sites in Hutchinson, Salina and Pittsburg, or until Sept. 23 by mail, e-mail or phone. For more information, call 800-662-0027 or 785-271-3140 or go to www.kcc.state.ks.us/.
The rate case comes at a rough time for the state regulatory agency that oversees public utilities, oil and gas production, motor carriers and telecommunications. After an audit documented serious dysfunction at the KCC, Patti Petersen-Klein was replaced as executive director last month.
The three-member commission is making other operational changes in the face of an open-meetings lawsuit filed by the Shawnee County district attorney over its troubling practice of issuing orders without a public meeting or vote.
Kansans have reason to wonder what has happened to the professionalism of the KCC – and whether it represents the public interest or big business.
So with this rate case, the company and its regulator both have something to prove.