Article

Wind plan reviewed; Regulators deem Westar plan 'prudent' but won't raise profits

State regulators are saying Westar Energy Inc.'s plans to invest in wind power are prudent but aren't allowing the utility to increase its profits. The Kansas Corporation Commission's decision created uncertainty about Westar's plans to invest in 295 megawatts of generating capacity from wind farms in three counties, enough to power 88,000 homes. ...Construction costs and the fact that wind doesn't blow consistently means that electricity from wind turbines more expensive per kilowatt hour in the short term than power from coal-fired plants. But commission spokeswoman Rosemary Foreman said Westar shareholders' risk was lessened because regulators will permit the utility to recover its investments in wind farms through its rates. "The commission just didn't think it justified, the ratepayers paying an additional cost," she said. "The risk to the company is minimized."

State regulators are saying Westar Energy Inc.'s plans to invest in wind power are prudent but aren't allowing the utility to increase its profits.

The Kansas Corporation Commission's decision created uncertainty about Westar's plans to invest in 295 megawatts of generating capacity from wind farms in three counties, enough to power 88,000 homes.

"We are still evaluating the order and what our next steps need to be," Westar spokeswoman Gina Penzig said Friday, adding that the utility would issue a statement later about its plans.

The three-member commission issued an order Thursday saying Westar can recover up to $282 million in projected costs from constructing two wind farms through the rates it charges its customers. But rates won't be adjusted for Westar's 673,000 customers until the wind-generated power starts flowing next year.

Westar, the state's largest electric utility, also asked the commission to allow its shareholders to earn an additional 1 percent return. Consumer advocates estimated that shareholders would receive an additional $50 million in profits over 20 years.

The utility had estimated that its proposal would have increased residential customers' bills between $2.00 and $2.50... more [truncated due to possible copyright]  

State regulators are saying Westar Energy Inc.'s plans to invest in wind power are prudent but aren't allowing the utility to increase its profits.

The Kansas Corporation Commission's decision created uncertainty about Westar's plans to invest in 295 megawatts of generating capacity from wind farms in three counties, enough to power 88,000 homes.

"We are still evaluating the order and what our next steps need to be," Westar spokeswoman Gina Penzig said Friday, adding that the utility would issue a statement later about its plans.

The three-member commission issued an order Thursday saying Westar can recover up to $282 million in projected costs from constructing two wind farms through the rates it charges its customers. But rates won't be adjusted for Westar's 673,000 customers until the wind-generated power starts flowing next year.

Westar, the state's largest electric utility, also asked the commission to allow its shareholders to earn an additional 1 percent return. Consumer advocates estimated that shareholders would receive an additional $50 million in profits over 20 years.

The utility had estimated that its proposal would have increased residential customers' bills between $2.00 and $2.50 a month on average. There were no figures for how much rates could increase under the commission's order.

Penzig said the company sought the higher return because of an increased financial risk associated with investing in renewable resources. State law allows utilities to seek an additional return of up to 2 percent for such investments.

Construction costs and the fact that wind doesn't blow consistently means that electricity from wind turbines more expensive per kilowatt hour in the short term than power from coal-fired plants.

But commission spokeswoman Rosemary Foreman said Westar shareholders' risk was lessened because regulators will permit the utility to recover its investments in wind farms through its rates.

"The commission just didn't think it justified, the ratepayers paying an additional cost," she said. "The risk to the company is minimized."

The Citizens' Utility Ratepayers Board, a state agency representing residential customers and small businesses, opposed increasing Westar's rate of return.

"On balance, we think it's a good and reasonable decision," said David Springe, the board's chief attorney.

Westar's plans included the construction of the 99-megawatt Central Plains Wind Farm in Wichita County, between Leoti and Scott City. The utility will own the entire farm.

It also planned to own half of the 100 megawatts of generating capacity from the proposed Flat Ridge Wind Farm in Barber County. It also would have a contract to purchase power form the half it didn't own.

Finally, Westar planned to contract for 96 megawatts of generating capacity from the Meridian Way Wind Farm in Cloud County.


Source: http://biz.yahoo.com/ap/071...

DEC 28 2007
http://www.windaction.org/posts/12558-wind-plan-reviewed-regulators-deem-westar-plan-prudent-but-won-t-raise-profits
back to top