2013 Rate Review
Below we address some of the most common questions about our rate filing. If your question is not answered, please submit it here.
We have filed a request with the KCC to increase rates by $31.7 million or about 1.7%. Westar is incurring about $42 million in costs as a result of EPA requirements to upgrade one of our power plants; but will offset about $10 million of that with cost reductions elsewhere. (News Release)
The request also includes re-examining how rates are set for different types of customers, a more flexible economic development program and a fund to assist low income customers.
How much will rates go up?
Re-examining how rates are set up for different types of customers (residential, business, industrial) means that costs for residential customers will increase.
For 23% of households that use less than 450 kilowatt hours per month, the proposed increase will be $4 per month or about 13 cents per day.
For 40% of households with average consumption between 450 and 900 kilowatt hours per month, the proposed increase will be about $7.50 per month or about 13 to 25 cents per day.
For 37% of households that average more than 900 kilowatt hours per month, the proposed increase will be more than 25 cents per day.
Why is Westar asking residential customers to pay more?
Re-examining rates is necessary to make sure rates are fair and reflect the cost of providing service to each type of customer.
A class cost of service study shows that large commercial and industrial customers are paying more than it costs to serve them and residential and small commercial customers are not paying the full cost of their electric service.
We believe that taking steps toward correcting cost differences will help Kansas remain competitive to neighboring states and over the long-term benefit from having strong companies with good paying jobs.
Why is Westar filing another Rate Case so soon?
Westar Energy’s follow-up request to recover environmental costs was outlined during our 2011 rate review. EPA mandates that we add new emission controls at our power plants. Before starting the project the KCC reviewed the project and found it to be in the public interest.
How do Westar's rates compare?
Westar Energy's rates remain a good value and competitive when compared with the nation and neighboring states.
What improvements in air emission will customers get from the La Cygne project once it is complete?
The four main emissions that will be reduced at La Cygne are nitrogen oxides (NOx), sulfur dioxide (SO2), mercury and particulates. We have already completed very large projects at other plants and have reduced NOx and SO2 by 66% and 85%, respectively.
What is Westar doing to help low income customers?
Part of our proposal includes the creation of a fund for low-income energy assistance.
The proposal would be funded in two ways:
1. Today, when our customers don’t need all the power from our plants, like during times of mild weather, we sell power to other utilities. We have used the gains on those sales to offset the cost of power plant fuel, which helps all customers. As a complement to Westar’s 25 year partnership in Project Deserve, we are asking the Commission to permit us to designate 10% of gains to provide additional direct utility assistance to low income assistance. If we did this last year we would have provided about an additional $650,000 in assistance.
2. We have proposed that all revenues from our customers who purchase additional increments of renewable energy (under the RENEW tariff) also go directly to help those in need of assistance.
How will the economic development component work?
Much of our costs exist regardless how much energy we sell. Accordingly, is we can sell more energy to new customers that locate or expand in Kansas; we take those dollars and offset rates for everyone. Economic growth helps all of our customers.
We are asking the Commission to approve an initiative we are referring to as “Promote Kansas”. Promote Kansas will permit Westar to become a partner in promoting economic development in Kansas. We condition our support based primarily on three criteria.
1. Creation of new jobs for Kansas.
2. Expansion of an existing business.
3. Economic development initiative is supposed and backed by the state or local economic development organizations.
We believe that a public and private partnership such as this will yield benefits for Kansas, and the communities we serve.
When will the change in prices take effect?
We have asked the KCC to issue an order in December. New rates typically go into effect the following month.