Kan. regulators approve $17M increase for Westar

Kansas regulators approved a $17 million rate increase Thursday for the state's largest electric company to help pay for wind farms and a new natural gas-fired power plant.

Residential customers of Westar Energy Inc. will pay an average of $1 more on their monthly bills, the Kansas Corporation Commission said. The higher rates should take effect within a month.

Westar received $194 million worth of rate increases last year to cover higher operating costs, upgrades of its transmission lines, improvements in power plants' pollution controls and repairs following a December 2007 ice storm.

Also Thursday, the commission ordered the immediate consolidation of most charges across Westar's northern and southern divisions. Westar formed from the early 1990s merger of two separate companies with different rates, and the commission has been pushing the two divisions' charges closer ever since.

The commission signed off on a settlement reached in December by Westar, the commission's staff, the Citizens' Utility Ratepayers Board and other parties. The ratepayers board represents small businesses and residential customers and had acknowledged state law allowed Westar to recover its investments in the wind farms and gas-fired plant.

"We knew it was coming," said David Springe, the ratepayers board's chief attorney. "There wasn't much you could do with that. The facilities are there; they're in use, and they're necessary."

Westar spokeswoman Karla Olsen said the gas-fired plant, outside Emporia, and the wind farms, in Wichita and Barber counties in western Kansas, are designed to meet increasing demands for power "with environmental concerns in mind."

"We're just happy everybody was able to come together to reach a settlement and all the parties saw the importance of these investments," Olsen said.

Consolidating rates for Westar's 684,000 customers has been a goal for the KCC since the merger forming the company.

The Wichita-based company that served what is now Westar's southern division owned 47 percent of the state's only nuclear power plant. It had much higher rates than the Topeka utility that served what became Westar's northern division, which didn't invest in nuclear power.

But the two divisions' rates were close enough last year that Westar pressed for consolidation.

The commission said Thursday that residential rates and most other rates will be consolidated immediately. Rates for large, industrial electric users will be consolidated over three years. A few other charges - unique to one division or the other - will be handled later, the commission said.

In regular trading Thursday on the New York Stock Exchange, Westar shares closed at $21.28, down 12 cents, or about 0.6 percent.

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On the Net:

Westar Energy: http://www.westarenergy.com

Kansas Corporation Commission: http://www.kcc.state.ks.us