Kansas Gas seeks 10 percent rate increase; only public hearing is in Topeka

Editor’s note: KGS is a division of Oklahoma natural gas giant ONE Gas. An earlier version of this story was incorrect.

Gas customers will get a chance this week to tell state regulators face-to-face what they think about a Kansas Gas Service proposal to increase the company’s rates by 10 percent, but Wichita-area residents may have to comment in another way.

The rate proposal would add an estimated $5.60 a month to the average gas bill, state officials say.

The commission has scheduled a public hearing for Thursday in Topeka. That’s likely to be the only chance customers will have to speak directly to the three members of the Kansas Corporation Commission, who will decide whether the request will be granted.

KGS, a division of Oklahoma natural gas giant ONE Gas, says that four main factors are driving its request for a rate increase:

▪ A $179 million investment over two years in safety and reliability improvements in the gas system.

▪ More efficient appliances and customer conservation efforts that are reducing the amount of gas KGS sells.

▪ A commission order requiring the company to return to ratepayers the windfall the gas company got from cuts in corporate income taxes ushered in by President Trump and Congress.

▪ Increased employee wages and benefits.

“The cumulative impact of these factors has necessitated the Company’s request for an overall revenue increase of $45.6 million,” KGS said in its application.

Of that $45.6 million, you’re already paying $2.9 million through separate bill charges, making the net requested increase $42.7 million.

Kansas House Minority Leader Jim Ward said he’s suspicious of the need for an increase because it’s been less than two years since rates last went up. Ordinarily, rate cases are requested by companies every four to five years.

“They just had one in November of 2016 that went into effect January of 2017,” Ward said. “Same arguments. Remember when they set the rates (in 2016), they also include upgrades and maintenance of pipeline.”

David Nickel, consumer counsel for the Citizens’ Utility Ratepayer Board, said the agency also has concerns about the KGS request. CURB is a small state agency that represents home and small-business customers in utility cases.

Chief among their concerns is a part of the proposal to increase the fixed monthly basic charge from $16.70 to $22.66, Nickel said.

“That’s a 25 percent increase,” he said. “I don’t know how you slice around that.”

According to the gas company’s filing, “the increase in the monthly customer charge will more appropriately provide for the recovery of fixed utility costs by the utility. “

But Nickel said high fixed charges are difficult for low- and fixed-income customers because they can’t save as much by cutting their usage and they get less of a break in the summer months when gas usage drops dramatically.

Customers out of range of Topeka will be able to watch Thursday’s hearing at the commission Web site, www.kcc.ks.gov, but not comment live. They will be able to file comments to the case record online, by mail, or by phone after the hearing.

“It’s not always possible to hold multiple hearings throughout the state,” said commission spokeswoman Linda Berry said.

In addition, gas cases have generally drawn smaller numbers of attendees than hearings on electric rate increases.

“As the commissioners have stated at many hearings, all the comments are given the same weight regardless of the manner in which they’re submitted,” she added.

In the past, the commission experimented with having remote sites with two-way video conferencing capability, with mixed results turnout-wise.

Nickel said he had gotten a call from the state Farm Bureau asking if there could be another hearing for customers who buy gas for farm irrigation. He said he told them that CURB doesn’t have any control of that and transferred that call to a commission official elsewhere in the building they share.

The process for the public hearing is the same one the commission attempted about months ago in a rate case involving Westar Energy.

In that case, the commission wound up scheduling a second hearing in Wichita after Ward requested it.

Just livestreaming a Topeka hearing, without the chance for the remote customers to ask questions or give live input, is not fair to south-central Kansas, which makes up a large part of the KGS customer base, Ward said.

Ward said he plans to attend Thursday’s hearing and request that the commission take live testimony from Wichita in the gas case, too.

“I intend to go and try to encourage them again, whenever they raise rates, they should talk to (customers); it shouldn’t be everybody needs to come to them, they should go to the ratepayers,” Ward said.

Commission hearings are divided into two part.

In the first, customers get to question company officials and state staff about the particulars of the rate case. Commissioners don’t attend that portion of the meeting.

Then, the commissioners come in and customers can give their testimony on the rate proposal.

In the Westar case, the first hearing in Topeka drew about 80 customers. The one in Wichita drew slightly more than 100. They gave the commissioners an earful of opposition and the rate increase turned into a rate cut for most of the customer base.

“I think that helped and Westar didn’t get everything they asked for,” Ward said. “I think if we hadn’t pushed to have greater accessibility to the hearings and there was therefore more knowledge about it, they would have gotten everything they wanted.”

The proposed increase only affects the rate the company is paid for its work obtaining and delivering gas and maintaining the gas system in a safe and reliable manner. The commission sets the rates for that part of your overall gas bill.

The actual cost of the gas itself is a pass-through charge to customers, meaning you pay essentially what the gas company pays to buy gas in the open market. That part of your gas bill fluctuates from month to month as market prices rise and fall.

Thursday’s hearing will begin at 6 p.m. at the Washburn Institute of Technology, Main Conference Center, Building A, 5724 SW Huntoon, Topeka.

Other ways to comment on the rate case:

▪ Online — Go to the KCC website and click on “Your Opinion Matters.” That will call up a list of cases currently open to comment.

▪ By mail — Kansas Corporation Commission, Office of Public Affairs and Consumer Protection, 1500 SW Arrowhead Road, Topeka, KS 66604-4027. Reference Docket No. 18-KGSG-560-RTS.

▪ By phone — Call the Commission’s Public Affairs office at 800-662-0027 or 785-271-3140.

Comments must be received by Dec. 14 to become part of the case record.

This story was originally published October 3, 2018 at 5:30 AM with the headline "Kansas Gas seeks 10 percent rate increase; only public hearing is in Topeka."