Westar Energy, Inc., (NYSE: WR) and other intervening parties to its rate review reached an agreement to increase prices $78 million or about half of Westar’s original request filed in March. The agreement still allows Westar to recover costs associated with mandated environmental upgrades to its LaCygne energy center but cuts significantly costs for other programs it had requested, including its proposals for investments to increase reliability. The agreement is subject to review and approval by the Kansas Corporation Commission.
“We understand the need to have a balanced, constructive approach to regulating our business, yet still allow us to provide clean, reliable, safe and cost-effective critical service for our customers,” Mark Ruelle, Westar Energy chief executive officer, said. “The agreement, if approved, also allows more choices for renewable energy for our customers and lets us make limited investments to improve grid reliability.”
Terms of the agreement include:
- A price increase of less than 25 cents per day for most households.
- Reducing the cost of the Westar Wind program by 75 percent, which allows customers to choose as much as 100 percent renewable energy for as little as an additional $2 per month.
- Introducing a customer solar program, which may be particularly of interest for those who can’t or don’t want to invest in and maintain their own equipment on the roof of their home.
- Allowing a limited program to revitalize parts of the electrical grid in Kansas, investing up to $50 million through early 2017. Westar had requested a significantly larger, more comprehensive five-year program to revitalize and protect the grid against outages that can result from large storms.
- Establishing a separate proceeding to address pricing structures for customers who install solar panels.
KCC Commissioners have until Oct. 28, 2015, to issue an order regarding Westar’s requested price increase. New prices will go into effect shortly after the KCC’s order.