Law's intent at crux of hearings: Regulators
want lawyers to learn what lawmakers intended in a 1978 law that allows
utilities extra profit when they develop renewable energy Dec 5
- McClatchy-Tribune Regional News - Dion Lefler The Wichita Eagle, Kan.
What you pay for wind power in the future could hinge on what the state
Legislature intended when it passed a law during the Carter Administration
to encourage development of alternative energy sources.
On Tuesday, the chairman of the Kansas Corporation Commission directed
parties in a Westar Energy wind-power case to research the intent behind a
1978 law that allows the commission to grant 0.5 percent to 2 percent in
extra profit potential to utilities developing renewable energy.
KCC Chairman Thomas Wright suggested the intent might have been to offer
utilities "a little bit of sugar to help that all go down."
The law was passed in the wake of an energy crisis that saw Americans
struggling to heat their homes and waiting hours in line to buy gasoline.
Wright said the law was apparently changed since it passed, but he did not
elaborate and said he did not know when or why the law was amended.
He directed lawyers in the Westar case to come prepared to discuss that when
they make their closing arguments today.
Westar's request for an extra percentage point of profit on wind has emerged
as a key issue in the commission's consideration of how to compensate the
company for the planned addition of 300 megawatts of wind power to its
system, which serves 674,000 Kansas customers.
Overall, adding that much wind power -- about enough to serve 90,000 homes
-- is expected to cost customers about $830 million over the next 20 years.
On Monday, Westar chief executive Bill Moore testified the company would
severely curtail or scrap its wind plan if the KCC doesn't grant the extra
profit potential.
The Citizens' Utility Ratepayer Board -- the state agency that represents
residential and small-business utility consumers -- has estimated that about
$50 million of the cost to customers would be increased profit for Westar
shareholders.
Tuesday, a CURB consultant testified that she doesn't think it's justified.
"I'm concerned nobody's looking out for ratepayers who are going to have to
pay the bills for this," said Andrea Crane.
Crane testified that she didn't know what state lawmakers had in mind in
1978, saying she was in college at the time.
"Who knows what the intent of this statute was 30 years ago?" she said.
She said wind power now is the rage as government as businesses scramble to
reduce carbon emissions to fight global climate change.
"Why in the world do you want to provide that 'sugar' to shareholders?" she
said in reference to Wright's comment.
Several Westar witnesses testified they want to get windmills on the ground
now to take advantage of tax credits that will expire at the end of 2008.
They also said they are concerned Congress will soon pass a "carbon tax"
that would increase future costs for energy generation using fossil fuels.
Reach Dion Lefler at 316-268-6527. |