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September 27, 2018
KCC approves settlement agreement lowering rates for Westar customers
Topeka - In a unanimous decision this morning, the Kansas Corporation Commission approved a settlement agreement that will cut electric rates for Westar customers by $66 million dollars annually. For the average residential customer, that equates to approximately $3.80 per month.
The settlement agreement also includes the Tax Cuts and Jobs Act (TCJA) bill credit to Westar customers of approximately $50 million and up-front bill credits of approximately $23 million based on the Commission approved merger of Westar and Kansas City Power and Light earlier this year.
In addition, today’s order approves the implementation of a three-part rate plan for distributed generation (DG) customers who installed their own source of electric power generation after October 28, 2015. The Commission finds that under the two-part rate design for DG customers currently in place, DG customers are receiving an unduly preferential rate and are being subsidized by other residential customers because they are not paying the same proportion of fixed costs.
Under the terms of the settlement agreement, a demand charge of $3.00 in the winter and $9.00 in the summer are added to DG residential rates. The service charge remains the same, while the energy charge is reduced by 40%. KCC Staff testimony during the evidentiary hearing indicated the new rates do not end the subsidy of DG customers, but are a compromise that avoids rate shock for DG customers.
In issuing today’s decision, the Commission found the settlement agreement to be in the public interest and that it will result in non-discriminatory, just and reasonable rates that will enable Westar to continue to provide sufficient and efficient service.
Today’s order can be viewed on the Commission’s website at http://estar.kcc.ks.gov/estar/ViewFile.aspx/20180927103146.pdf?Id=6a4e143a-438b-4437-8364-894d8b7310d5
Westar filed an application for rate review in February, requesting an increase of $52.6 million, which would have resulted in an average monthly increase of $5.91. In July, the company reached a non-unanimous settlement agreement with KCC Staff, the Citizens Utility Ratepayer Board and many interveners in the case.