Karl Peterjohn and Richard Ranzau: Proposed electrical rate increases are excessive
07/05/2013 8:21 PM
07/05/2013 8:21 PM
The following is an edited version of a letter that Sedgwick County Commissioners Karl Peterjohn and Richard Ranzau sent to the Kansas Corporation Commission:
Residential consumers are facing an 8.77 percent, or $62 million, electrical rate hike. This is excessive.
Smaller businesses are facing a 6.28 percent, or $21.5 million, rate hike. This is also excessive.
This $83.5 million proposed increase is almost five times higher than overall inflation for Kansas consumers. And it is occurring at a time when the Kansas economy continues to struggle.
It’s also the 19th rate increase that Westar Energy has requested since 2009.
The fact that natural-gas power generation is now more feasible is a factor in the requested rate reduction of $30.3 million for a number of large electrical users. We suspect that this proposed decrease is tied to new co-generation options and the desire to preserve this customer base.
If Westar wishes to reduce its rates by $30.3 million for industrial users, special-contract customers, medium general-service customers or schools, that is its prerogative. However, just shifting these costs onto residential and small-business consumers should be stopped.
There is another important factor that must be considered. The state’s renewable portfolio standard requires that an increasing percentage of electrical power be generated by non-carbon or uranium-based energy sources. Whether the energy comes from solar, wind power or any other politically correct power, this mandate is forcing higher prices.
Here are some recommended steps that the Kansas Corporation Commission should enact concerning Westar’s rate case:• Limit any residential rate hikes to the increase in the consumer price index for Kansas.
• Westar and all other electricity producers in Kansas need to identify the increased costs in their base due to the renewable portfolio standard. Rate increases due to RPS should be limited to a percentage of the total RPS cost. The KCC should not allow the full cost of RPS to be placed on consumers.
• Similar federal mandates need to be identified and included in any RPS data. The role of state and federal mandates on rising electric rates needs to be clearly identified before any rate requests are considered.
• The overall rate hike needs to be capped for all categories of Kansas electrical consumers.
• If state RPS mandates continue generating rate increases, these mandates will need to be examined by the Legislature and the governor for reform and repeal to prevent this and future electricity rate hikes.
• If federal regulations create or extend these state RPS mandates and continue raising electricity costs, these costs must also be identified. This will also require a political solution.