Kansas regulators approve $78M rate hike for Westar Energy

JOHN HANNA, Associated Press

Kansas regulators approve $78M rate hike for Westar Energy

TOPEKA, Kan. (AP) — Most households served by Kansas' largest electric company will see their monthly bills rise from $5 to $7 a month starting in November after state regulators gave final approval Thursday to a rate increase.

The Kansas Corporation Commission unanimously approved an order boosting rates for Topeka-based Westar Energy Inc. by $78 million a year. The increase is about 4 percent.

The commission's order ratifies an agreement among the company, the commission's staff, some of Westar's largest customers and the Citizens' Utility Ratepayers Board, a state agency representing residential customers and small businesses. Commissioners publicly endorsed the deal last month.

The ratepayer board acknowledged that Westar was due a rate increase under state law to cover costs the utility already incurred while upgrading power plants. David Springe, the board's chief attorney, said Westar made "pretty reasonable" compromises in the agreement.

"On balance, it's about as good a result as I think you could expect," Springe said.

Much of the new revenues will cover the costs of upgrades at a coal-fired power plant near LaCygne, in eastern Kansas, and at the Wolf Creek nuclear power plant about 55 miles south of Topeka. Improvements at LaCygne were required by federal air pollution standards, the company said, while upgrades at Wolf Creek are tied to a decision to keep it in operation for 20 years longer than initially planned, until 2045.

Westar, based in Topeka, has nearly 700,000 customers and initially proposed increasing its annual rates by $152 million. In the agreement, the company whittled down a five-year plan for upgrading its electric grid and accepted a lower profit margin for its stockholders.

"We also are aware that any price increases can be a challenge for customers and we are working every day to be more efficient and keep prices as low as we can," company spokeswoman Gina Penzig said.

The three commission members said in their order that the agreement still kept Westar's rates within a "zone of reasonableness."

The commission's action also postponed a decision on a proposal from Westar to revise special rates for customers who install solar panels, which drew strong opposition from solar energy advocates. The KCC will consider such issues in a separate case.

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