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August 20, 2014
Kansas Corporation Commission Files Complaint with FERC Against Westar Energy, Inc. Contending Unjust and Unreasonable Transmission Rates
Topeka, KS - Today, the Kansas Corporation Commission (Kansas Commission) filed a complaint against Westar Energy, Inc. at the Federal Energy Regulatory Commission (FERC). The Complaint contends Westar is charging unjust and unreasonable electric transmission rates. If the Complaint is granted, Westar's current rates could be reduced by approximately $15.8 million annually. Based on anticipated utility growth, this figure is expected to approximately double over the next five years.
In the Complaint, the Kansas Commission specifically objects to the Return on Equity (ROE) component in Westar's current Transmission Formula Rate (TFR). In particular, the Kansas Commission's Complaint shows Westar's 11.3% ROE is unreasonably high and results in unjust and unreasonable rates for Kansas ratepayers. In contrast, the Kansas Commission's analysis indicates that Westar's cost of equity should be 9.37%.
Prior to filing this Complaint, the Kansas Commission approached Westar and requested it voluntarily reduce the ROE component of its TFR, similar to Westar's recent agreement regarding its Generation Formula Rate ROE. Unfortunately, those discussions failed, necessitating the instant filing.
The Complaint can be found at http://elibrary.ferc.gov/idmws/file_list.asp?accession_num=20140820-5184.
Westar Energy, Inc. is Kansas' largest electric utility. It provides electric service to nearly 700,000 customers and has 7,200 MW of electric generation capacity fueled by coal, uranium, natural gas, wind, and landfill gas.
The Kansas Commission regulates public utilities including telecommunications, natural gas, electric and water companies, and oil and gas producers. The Kansas Commission's regulatory oversight of public utilities primarily pertains to rates and terms of service. In order to ensure that customers of regulated utilities are provided sufficient and efficient service at just and reasonable rates - jurisdictional utilities may not change retail rates without Commission approval.