State officials have approved a settlement that will lower Westar Energy rates for most customers, but substantially raise costs for homeowners who provide some of their own power with solar panels.
The Kansas Corporation Commission approved the settlement unanimously over objections from environmental groups who said it will strangle the budding home-solar industry in Kansas.
The deal will save regular customers who get all their power from Westar an average of about $3.80 a month. But it will hit customers with home solar panels with a separate charge that could cost them an extra $27 to $36 a month, making it less worthwhile to invest in home generation.
The extra charge for solar customers is called a “demand charge” and amounts to $9 per kilowatt for the solar customer’s highest usage for one hour each month in the summer, $3 in the winter when demand on the power system is lower.
The settlement was crafted by Westar, commission staff, the Citizens’ Utility Ratepayer board and several commercial interests that joined the case.
It reversed what had been a proposed $17 million rate increase and turned it into a $66 million net rate cut.
Some of the rate cuts are part of an agreement that Westar made to get permission to merge with Kansas City Power & Light to form a larger company called Evergy, a new name slowly rolling out to replace Westar and KCP&L.
The Sierra Club, Vote Solar and the Climate and Energy Project continued to fight the settlement after other consumer interests signed on, arguing that it discriminates against home solar users.
In well-attended public hearings in Wichita and Topeka, dozens of angry customers had argued that the demand charge on solar customers would punish them for reducing pollution, while others who use less power don’t get penalized.
They characterized it as an attempt by Westar to strangle home-based solar energy and protect the company’s monopoly on generation.
Westar said that it needed the extra charge because solar customers buy less electricity and, according to the company, don’t pay their fair share of the cost of operating the system that provides for their power needs beyond what they can generate themselves.
The commissioners agreed with Westar.
“The Commission finds that, in Westar’s case, under the two-part rate design for (solar) customers currently in place, the (solar) customers are receiving a preferential rate,” the commission said in its order approving the settlement.