Utility commissioner calls CURB representation inadequate

UPDATE: Citizens’ Utility Ratepayer Board members are meeting in Wichita to interview applicants for the open position of consumer counsel.

The board held a brief public session at the downtown Wichita library Friday morning before recessing to closed session for the job interviews.

In the public session, Philip Michael, a lawyer with the Department of Administration on loan to CURB, presented the board with a list of current utility cases and notes from a Kansas Corporation Commission seminar held Monday on the Environmental Protection Agency’s Clean Power Plan. The presentations included material from five Kansas utility companies and three utility associations.

A day after the seminar, the U.S. Supreme Court stayed the Clean Power Plan pending court challenges by 29 states and dozens of industry groups.

Kansas Corporation Commissioner Pat Apple said Thursday that he doesn’t think the Citizens’ Utility Ratepayer Board has adequately represented customers in a rate case involving the state’s second-largest gas utility, and he slammed a key aspect of a settlement agreement that CURB signed off on.

Apple’s comments at a commission meeting were the first solid indication that turmoil at CURB – the state agency charged with representing residential and small-business utility consumers – is affecting the process of setting customers’ rates.

Apple said CURB obviously changed positions to favor a settlement that would give Atmos Energy as much as $75 million in extra rate income to pay for replacement of aging pipes.

And, he said, CURB didn’t have a lawyer to represent consumers at a hearing on the settlement, instead placing that in the hands of a rate consultant who is not an attorney.

“It is apparent that there was a very different position of CURB three months ago – and also note consumer counsel did not represent CURB or the ratepayers at the settlement hearing,” Apple said.

Apple, a former state senator, said the Atmos case has widespread implications for all gas customers in Kansas.

If the settlement passes as is, “The ratepayers will have their bills increasing several times per year with less scrutiny by KCC,” he said. “Traditional ratemaking will be substantially changed for years to come, all of this while ratepayers are not adequately represented by consumer counsel.”

CURB Chairwoman Ellen Janoski declined to comment on the case, but said CURB has borrowed an attorney to handle such matters while it works toward rebuilding its legal staff.

The board is holding a meeting Friday morning at the Wichita downtown library that will include closed-session job interviews with consumer counsel applicants. Janoski said she expects to fill at least one of CURB’s open attorney positions within the next couple of weeks.

“Until then, there’s really not a need to make a statement to the press on these issues,” she said.

David Springe, who had served as CURB’s chief consumer counsel for 14 years, left the agency in December to take a job with a national association of utility consumer advocates.

Then the board’s chairman, former Republican state legislator Brian Weber, resigned after a meeting where other members of the CURB board denounced global climate change science as a “fraud” and contemplated shifting agency resources to fight federal air-quality regulations that are raising the price of coal generation.

At that same meeting, the CURB board stripped its interim consumer counsel, Niki Christopher, of authority to speak to the Legislature or the news media on utility issues.

Finally, on Jan. 25, the board fired Christopher over an e-mail that Janoski called “unsolicited” and “disrespectful.” Christopher’s strongly worded e-mail advised the board to reinstate her authority as a way to smooth relationships with the Legislature and head off hearings on a House bill designed to limit the board’s control.

In the case at hand Thursday, Atmos is seeking an increase in its regular rates, plus an additional rate hike for a “System Integrity Plan” – or SIP – to pay for the replacement of aging pipes.

Atmos serves 130,000 Kansas customers, mostly in the Kansas City suburbs, but with smaller systems scattered across the state, including Sumner and Harper counties.

The company currently gets about $7 million a year through the Gas Service Reliability Surcharge, a separate line item on customer bills approved by the Legislature to pay for replacing aging infrastructure, according to case records.

The SIP plan would give the company an additional $75 million spread over five years.

Apple said he’s concerned that CURB initially blasted that idea, but then supported it as part of the settlement.

“The adoption of a SIP in this docket will significantly reshape the traditional ratemaking process in Kansas,” he said. “This process should be thoroughly vetted and considered in (a) general investigation and not in this rate case.”

Commissioner Shari Feist-Albrecht supported Atmos’ request, noting that some of the pipes in question had been in the ground 60 to 75 years and are in need of replacement.

She said the replacement program could be altered if the general investigation indicates a better way to finance it.

Commission Chairman Jay Emler said he wanted more information on how the rate case and the general investigation would mesh before proceeding to a final order.

This story was originally published February 11, 2016 at 6:54 PM with the headline "Utility commissioner calls CURB representation inadequate."