Press Release

June 4, 2008

Westar seeks $177 million rate increase: CURB fears it's much more

Westar Energy has filed an application for a base rate increase of $177 million, but the request doesn't include millions that will be passed through to customers through surcharges that customers pay in addition to base rates. CURB's experts will be analyzing the application over the coming months in an effort to determine whether the entire increase is justified, and how much the customers would be paying altogether, when the surcharges are factored in.

What we do know is that Westar has filed for a $22 million increase of its environmental surcharge for the coming year. The company is also going to be passing through its increasing transmission costs to customers through a transmission delivery charge. When the nearly-completed Emporia natural gas plant comes on line, the fuel will be included in the energy charge adjustment (ECA). The ECA is a big component of rates: with natural gas prices and transportation costs for coal approaching all-time highs, customers are sure to see a hefty shift upwards in electric bills, especially during the summer cooling season. Additionally, franchise fees and property taxes are passed through to customers through surcharges. With Westar adding additional plant, property taxes are sure to increase. All of these increases are in addition to Westar's request to boost rates by $177 million.

Westar cites increased costs of operations, construction of new plants and the expenses incurred in repairing Westar's system after three major ice storms as among the reasons for the requested base rate increase. The costs incurred so far for environmental upgrades Westar is undertaking at several of its plants will also be a factor, although whether they will be included in base rates or in a surcharge will be determined in another docket before the rate case is decided.

This case is just getting started: CURB will have more to say about it after our experts have had an opportunity to thoroughly examine Westar's application. It seems certain, however, that customers will be facing substantial increases in the coming year, even if CURB is successful in trimming the fat from Westar's request.

KCC Docket No. 08-WSEE-1041-RTS