Kansas’ largest utility company this week agreed to cut a proposed rate increase nearly in half and split off a controversial solar energy element for further study.
David Springe, the lead attorney for the Citizens’ Utility Ratepayer Board, had advocated both measures shortly after Westar Energy proposed the $152 million rate increase in March.
Thursday’s announcement that Westar officials had agreed to a $78 million settlement represented a victory for CURB, which had suggested a $51 million increase.
Springe, whose agency represents electricity consumers, gave plaudits to Westar officials for embracing a compromise that reduced the dividends that shareholders would have seen with a $152 million increase.
“I’m truly surprised that in a couple of days we managed to settle the whole thing,” Springe said. “They really came to the table with constructive ideas, and they walked away from a lot of things to get to this settlement.”
The Kansas Corporation Commission still needs to approve the settlement.
Westar CEO Mark Ruelle said the deal still would allow his company to make needed environmental upgrades to a coal plant in LaCygne, but it will reduce some grid reliability projects.
“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,” Ruelle said. “The agreement, if approved, also allows more choices for renewable energy for our customers and lets us make limited investments to improve grid reliability.”
Westar’s original proposal would have split utility bill options into three schemes, and customers who installed new solar panels would have been forced to choose between two with higher fixed costs and lower usage charges.
Westar officials said they needed to set solar users apart to better account for the cost of providing them access to the grid and its infrastructure.
But the proposal kicked up strong resistance from solar companies and environmentalists who rallied outside KCC public hearings in Topeka and Wichita.
Springe had said Westar’s concerns had merit, given the likely increase in solar users as the technology becomes more efficient and affordable. But he said the issue, which utilities across the country are beginning to face, deserved more study to determine the actual costs and benefits to the utility.
The utility company dropped its three-tiered proposal and agreed to keep new solar customers in the current residential plan, while opening a docket to explore solar issues further.
“We got everything we wanted on that,” Springe said. “That’s a big win.”
But he said solar industry representatives may still choose to challenge one portion of the settlement that includes a “distributed generation” tariff that could increase the bills of customers who install solar in the future.
Westar’s 300 current solar customers are grandfathered in and not subject to any new charges. But in order to prevent more solar installers from becoming grandfathered in while the KCC studies the effects of distributed generation, CURB and Westar agreed to establish the tariff that for now is zero.
Groups concerned with climate change also were not pleased with the settlement’s $2.50-per-month flat fee increase, although it was much less than the increase Westar sought.
Dorothy Barnett, executive director of the Climate and Energy Project, said her group continues to urge utilities to stick with usage fees, which provide an incentive to conserve energy, rather than flat fees that remain the same no matter how little electricity a customer uses.
“Increasing mandatory fixed fees — even at a reduced amount — takes away control over energy costs and options for Kansans and forces costs disproportionately on people who use the least energy,” Barnett said.