Westar Energy Gets 50% of Rate Increase Requested Last March

Westar Energy - the largest electric company in Kansas, serving about 700,000 residential, commercial and industrial customers - reached agreement with “intervening parties to its rate review” to increase prices by $78 million.

That price tag represents about half of Westar’s original request filed in March, when it asked the Kansas Corporation Commission to adjust its prices by 7.9 percent or $152 million. At the time, Westar said that the nine-figure uptick reflected the cost of mandated environmental upgrades to comply with clean air regulations, life-extension improvements to Wolf Creek Nuclear Generating Station in the eastern part of the state, and investments to protect the grid against power outages, among other costs.

This week, the company said, “The agreement still allows Westar to recover costs associated with mandated environmental upgrades to its LaCygne Generating Station,” a 1,418 MW coal plant located in the East Central part of Kansas.

“However,” the generator said, the cuts would “significantly costs for other programs … requested, including its proposals for investments to increase reliability.”

“We understand the need to have a balanced, constructive approach to regulating our business, yet still allow us to provide clean, reliable, safe and cost-effective critical service for our customers,” Westar Energy CEO Mark Ruelle commented, adding, “The agreement, if approved, also allows more choices for renewable energy for our customers and lets us make limited investments to improve grid reliability.”

Specifically, terms of the agreement include:

• A price increase of less than 25 cents per day for most households;
• A reduction in the cost of the Westar Wind program – which allows customers to choose as much as 100 percent renewable energy for as little as an additional $2 per month  – by 75 percent;
• A new customer solar program, which may be particularly of interest to those who can’t, or don’t want to, invest in and maintain equipment on their own rooftops; and
• A limited program to revitalize parts of the electrical grid in Kansas, investing up to $50 million through early 2017. (Westar had requested a significantly larger, more comprehensive five-year program to revitalize and protect the grid against outages that can result from large storms.)

Westar plans to start a separate proceeding to address pricing structures for customers who install solar panels.

The agreement still is subject to review and approval by the Kansas Corporation Commission. KCC commissioners have until Oct. 28, 2015, to issue an order regarding Westar’s requested price increase. New prices will go into effect shortly after the KCC order.