January 31, 2005
KCC Grants Aquila a $7.4 million Electric Rate Increase
The Kansas Corporation Commission has approved a $7.4 million rate increase for Aquila, Inc.'s WPK (WestPlains Kansas) electric utility, which will increase customer rates about 11%. In its application, the company had requested an increase of $19.2 million.
The Citizens' Utility Ratepayer Board (CURBi) filed testimony that, if adopted, would have held the increase to only $2.2 million. The testimony of CURB and several large industrial customers helped hold the increase to less than half of the increase the company wanted. The increase will be spread evenly across other customer classes.
Most disappointing was the Commission's decision to shift $1.8 million in losses on two industrial contract customers to residential and small commercial consumers. discount rate. CURB had argued that the company could have prevented the losses, but chose to do nothing.
According to Consumer Counsel David Springe, "Aquila's ratepayers should not be required to bear costs created by management's failure to act. The ratepayers already pay the full cost of fuel used to serve them because Aquila has an energy charge adjustment - ECA - which passes through the company's actual costs of fuel to its customers." As a result of the KCC's decision, Springe said, each WestPlains' customer will pay roughly $20 to $30 a year to help pay the costs of fuel to serve these two customers.
More encouraging, however, was the KCC's decision to open a docket to investigate Aquila's generation and transmission problems, as well as look into WPK's troubling transactions with out-of-state affiliates - problems which CURB believes are creating excessive costs for Kansas customers. The Commission also ordered the company to meet with CURB and Commission Staff to explore adopting a hedge program for the utility.
The KCC relied heavily on its Staff's positions in making its determinations, but did consider CURB's positions on a number of issues. David Springe, Consumer Counsel for CURB, said that CURB is reviewing the order and will make its determination whether to file a petition for reconsideration sometime this week.
Aquila provides electric service to approximately 68,500 customers in over 150 communities in Southwest and North-central Kansas, including Caldwell, Concordia, Dodge City, Downs, Ellsworth, Fowler, Great Bend, Harper, Liberal, Medicine Lodge, Minneola, Ness City, Phillipsburg, Plains, Plainville, Smith Center, Spearville and Sublette.
CURB is a five member volunteer Board appointed by the Governor to act as the voice of consumers in utility proceedings in Kansas. CURB, through its Office of Consumer Counsel, advocates for the interests of residential and small commercial utility customers before the Kansas Corporation Commission and the Kansas Courts. For more information about CURB, visit the CURB website at http://curb.kcc.state.ks.us/, or call the Consumer Counsel, David Springe, at 785-271-3200.