Press Release

January 21, 2009

Westar granted $130 million rate increase to recover cost of ice storm damage, new wind generation and Emporia Energy Center

The December 2007 ice storm, causing the greatest storm devastation in Kansas history, new wind and gas-fired generation are major factors in today's decision by the Kansas Corporation Commission (KCC) to approve an agreement granting Westar Energy (Westar) an overall annual revenue increase of $130 million or approximately 11 percent.

KCC Staff, the Citizens' Utility Ratepayer Board (CURB), the Kansas Industrial Consumers Group, Inc.. (KIC), Unified School District 259, Kroger Co., Wal-Mart Stores, Inc., Kaw Valley Electric Cooperative, Doniphan Electric Cooperative, Nemaha-Marshall Electric Cooperative, Kansas Electric Power Cooperative (KEPCo), U.S. Department of Defense, and Midwest Energy, Inc., all of the parties to the docket, joined in asking the Commission to approve the agreement.

The overall annual revenue increase will be divided evenly between the Company's two divisions, Westar North and Westar South. The new rates will become effective within the next 30 days, pending the filing and approval of new tariffs reflecting the new rate schedules.

The average residential customer can expect to see an increase of approximately $6 to $9 per month in their bill. Most commercial and industrial customers can expect increases ranging from approximately 7 percent to 14 percent depending on size and usage characteristics of service.

Approximately $80 to $90 million of this increase is recovery of costs associated with the damage to the company's system from the 2007 ice storm, along with the investment in wind generation and the new natural gas Emporia Energy Center.

The agreement also allows Westar to file an abbreviated rate case to recover further incremental costs of the Emporia Energy Center and the wind generation, which will defer paying for these costs by consumers until these projects are completed.

With the difference between Westar North and Westar South rates being so minimal, the Company raised the question in this case of consolidation of the rates. KCC Staff supported the proposal and along with other parties stated it would best be addressed in a separate proceeding. The Commission stated that this issue is too important to decide on anything less than a complete record and a new proceeding would give interested parties and Westar customers the opportunity to provide public input focused solely on rate consolidation and rate design. The Commission further directed a separate docket be opened on this issue.

On May 28, 2008, Westar filed an application with the KCC requesting a revenue increase of $177.6 million or approximately 15 percent. Following a comprehensive audit, KCC Staff determined that an increase of $95.1 million was appropriate. Based on additional information received during the discovery process, staff would have revised its recommendation to $113 million had the Agreement not been reached.

Westar's last rate increase of $3 million was granted in December 2005. The company had requested an overall increase of $84.1 million.

Westar is the largest electric utility in Kansas, providing electric service to more than 675,000 retail customers in the state. Westar has about 6,500 megawatts of electric generation capacity and operates approximately 33,000 miles of electric distribution and transmission lines.

Release No. 01-2009
Docket No. 08-WSEE-1041-RTS