Solar users urge Westar to rethink rate hike proposalJul 24 - McClatchy-Tribune Content Agency, LLC - Matt Riedl The Wichita Eagle
Westar customers want the utility to rethink how it's proposing to bill solar energy users and remove that altogether from its rate increase proposal. That was the overwhelming sentiment at Wichita State University's Hughes Metropolitan Complex on Thursday, when the Kansas Corporation Commission hosted its final public hearing on Westar's rate increase proposals. Perhaps unsurprisingly, virtually no one at the hearing was in support of the proposed $152 million rate hike. "They're outrageous," said Jane Byrnes, of Wichita. "That's kissing the bottom of fossil fuel and not looking to the future. They're protecting pollution and not looking to the future." Westar Energy has proposed a $152 million rate hike, a nearly 8 percent increase over current rates. That would raise the average homeowner's electric bill anywhere from $9 to $13 per month, according to Westar figures. The company has said the rates are being increased so it can recover money it has spend on necessary upgrades at the La Cygne coal power plant and Wolf Creek nuclear power plant. Gina Penzig, a spokeswoman for Westar, said Wolf Creek was originally planned to be in service for about 40 years. If the proposal passes, it should extend the life of the nuclear power plant by another 20, she said. "Westar clearly has expended money in doing environmental upgrades," said David Springe, the consumer counselor for the Citizens' Utility Ratepayer Board (CURB). "There's going to be a rate increase -- it's not going away. The question is how much." The proposed rate hike also increases a fixed charge for Westar's residential service. Customers currently pay $12 a month simply to have Westar service, but the plan would increase that amount by $3 every year for the next five years. Springe said after reviewing Westar documentation, CURB recommended lowering the rate increase to $51 million. He said Westar's proposal is expected to bring shareholders a 10 percent return on equity. "We think that's too high," Springe said. "Westar is a for-profit company -- they have shareholders, they are obligated to some degree to pay dividends, and they have fiduciary obligations to their shareholders." Springe said a "more appropriate" shareholder profit proposal hovers around 8.85 percent -- that decrease alone, he said, would subtract $50 million from the proposal. Another major point of contention at the hearing was how the company proposed to bill solar energy users. Westar has fewer than 300 customers who use solar panels on their roofs to supplement their consumption, said Jeff Martin, Westar's vice president for regulatory affairs. Anyone who installs solar panels on their property after October of this year would be put in one of two new rate classes, paying either a $50-a-month base service rate or a variable "demand charge" based on peak usage, for access to Westar power when the sun isn't shining. "Our current pricing structures do not reflect the fixed costs required to serve each household," Martin said. "This request has created a lot of debate, and we will continue to work with CURB and staff to find ways to balance, to make sure that those who use the grid also pay for it." About 30 solar-energy advocates stood outside of the building before the hearing began, holding yellow umbrellas with the words "Don't Block the Sun" printed on them. "Ironically they actually do block the sun," said Aron Cromwell, CEO of Lawrence-based Cromwell Environmental. "We wanted to send a Westar to let us have our ability to use our roofs to do whatever we want on them and create a little bit of energy." Cromwell said his company has installed solar panels on many Kansans' houses, and that doing so costs about as much as a new car. Several people made on-the-record comments to the Kansas Corporation Commission saying the proposed Westar plan removes the incentive for people to try alternative energy sources such as solar. "If there is a cost to solar, then that needs to be determined in an unbiased, third-party, independent study," said Scott White, a research and project analyst at Cromwell Solar. "That doesn't need to be decided by the solar industry and it doesn't need to be decided by shareholders." The Sedgwick County Commission on Wednesday passed a resolution opposing the rate hike request, and Commissioner Karl Peterjohn was present at Thursday's hearing to represent the commission. "A rate hike of this dimension on top of the prior rate hikes is going to hurt us in serveral different ways," Peterjohn said. "We're working very hard to create a competitive business environment. If our rates are rising and look like they're going to continue to rise in the near future, that creates some long-term competitiveness issues." Westar will prepare testimony and evidence supporting its position before an evidentiary hearing in Topeka starting on. The hearing is open to the public, and is slated to be streamed live on the Kansas Corporation Commission's website. Nothing will be officially decided until the commission issues its order on Oct. 28. Reach Matt Riedl at 316-268-6660 or mriedl@wichitaeagle.com. Follow him on Twitter: @RiedlMatt. http://www.energycentral.com/functional/news/news_detail.cfm?did=36862717 |