Westar seeks rate hike to offset conservation

Wichita-area residents will have their chance to be heard Thursday on a plan by Westar Energy to join a conservation program that could save power for some customers but also raise all customers' bills.

Westar is proposing to become a partner utility with Efficiency Kansas, a state program tapping federal stimulus money to assist Kansans with energy efficiency improvements such as adding insulation and replacing inefficient furnaces with newer units that use less power.

Consumer advocates say they support the goal of reducing energy use, but object to provisions in Westar's proposal that would allow the company to recover revenue from lost sales to customers who cut their use.

The plan will be up for public debate today and Thursday at hearings by the Kansas Corporation Commission, which will decide whether to let Westar go forward.

Supporters and opponents of the Westar plan will present their cases. Then members of the public will be able to tell the commission what they think.

The Wichita-area hearing will be at 6 p.m. Thursday at the Wichita State University Hughes Metropolitan Complex, 5015 E. 29th St. North.

A hearing for northern and southeastern Kansas customers will be today in Topeka, with a videoconference link to Pittsburg.

Loans for efficiency

Westar spokeswoman Gina Penzig said the company's plan "is a way to make energy efficiency improvements more available to Kansas residents and small businesses."

Participants would receive an energy audit on their home or business, to identify opportunities to conserve power. Residential customers would be eligible for loans of as much as $20,000 and business customers, $30,000.

While consumers could borrow directly through Efficiency Kansas and participating banks, the Westar program would allow participants to pay their loan directly through their power bill, "so there's a convenience factor," Penzig said.

Westar would charge participating customers a flat fee of $240 to compensate the company for its costs of administering the loans.

The controversial part of the plan revolves around Westar's attempt to gain compensation for lost energy sales.

When customers conserve, Westar sells less power. It is proposing to increase rates on all customers to make up the difference so the company doesn't lose money.

Opposition to plan

That part of the plan is strongly opposed by the Citizens' Utility Ratepayer Board, the state agency representing residential and small-business utility customers.

"They (Westar officials) want to do the energy efficiency program and get paid for everything they lose, so the consumer essentially ends up paying twice," said Steve Rarrick, a staff attorney for CURB. "It's not a good deal for us."

Westar's proposal is similar to a plan recently put forth by Black Hills Energy, a natural gas company serving about a fourth of Sedgwick County.

That proposal went to a public hearing in July but was withdrawn by the company about a month later.

Because Westar is the state's dominant utility, with 687,000 customers, the decision in its case is expected to set a precedent for smaller utilities across Kansas.