Every time a Westar Energy rate request is granted, which seems like every time one is requested, most Kansans get higher electric bills. They also get more reason to wonder whether their interests stand a chance in the regulatory machinery.
Last week’s transmission charge approval only deepened both the mystery and residential ratepayers’ misery. The $25 million increase, effective immediately, was on top of last fall’s $78 million rate hike, which was among the 25 times Westar rates have risen since 2009 for more than $630 million total.
A day before the Kansas Corporation Commission’s most recent approval, the Federal Energy Regulatory Commission had ruled that Westar had been overearning on the transmission charge, approving a settlement calling for the related rate of return for Westar shareholders to decline to 9.8 percent (from an unreasonable 11.3 percent).
But a 2007 law obligated the KCC to rubber-stamp the immediate increases in the transmission charge – which it did with little discussion. Anticipated refunds of $10 million to overcharged customers based on the federal order are months away, via lower bills, after more involvement by the company, KCC and FERC.
For now, residential users will see a 31 percent hike, or about $4 more a month, as most businesses see their transmission charge decrease. The official justification for the disparate burden was that residential customers use the most power during peak periods. What’s more, school districts now have a 29 percent transmission charge hike to add to their budget struggles amid flat state funding.
Legislators should take another look at the 2007 statute. A law requiring automatic approval after a cursory KCC calculation seems inconsistent with what is meant to be the KCC’s deliberative, fact- and cost-based assessment of utility rate requests.
And Kansans will be watching the Citizens’ Utility Ratepayer Board, which has been granted permission to intervene in the case, to see whether the state agency follows its recently stated partisan inclinations or fulfills its statutory role to advocate for residential and small-business customers in such complex utility regulatory decisions.
Westar has the tough obligation of coping with federal environmental rules as well as state and federal energy regulation, and the company obviously needs a means to cover the costs of transmission as well as its electricity.
But Kansans shouldn’t feel so powerless to do anything about how much they pay for that electricity.