Role in wind projects up in air 

Consumer group asks whether Sebelius used undue influence

A consumer group is asking Gov. Kathleen Sebelius to explain whether her administration tried to influence a decision on a request to develop wind energy or set electricity rates.

David Springe, attorney for the Citizens Utility Ratepayer Board, said he isn’t alleging any wrongdoing by Sebelius in Westar Energy Inc.’s request to the Kansas Corporation Commission for a rate increase to build the largest wind-generated electricity program in the state.

But Springe said an internal e-mail from Westar and statements made by Sebelius and others demands answers.

Jim Haines, Westar’s chief executive officer, wrote other utility executives in December 2006, saying Sebelius promised they would be “fully compensated” for building wind power projects.

CURB wants to know what assurances, if any, were given to Westar and other utilities that they would receive favorable treatment from the KCC to increase monthly electric bills to pay for new wind turbines.

“We need to at least act and make sure the process is fair,” Springe said. “We really don’t know the answer. The board hopes that what we get from the commission is affirmation that they haven’t made any promises to any parties.”

Sebelius spokeswoman Nicole Corcoran said no assurances were given to utilities that they would get special treatment by the KCC, but they were told they would be compensated through the rate process for their investment.

“The governor never advised members of the KCC which utility applications they should approve, how they should set rates or what those rates should be,” Corcoran said in a statement. “The implication by CURB is off base.”

The questions arise from Westar’s request for pre-approval from the KCC to increase electric rates to develop wind energy.

CURB has asked that two KCC members, Michael Moffet and Thomas Wright, recuse themselves from hearing Westar’s request, or state why they should stay on the case.

A third member, Joseph Harkins, recused himself earlier this year. He was Sebelius’ energy adviser from 2003 to 2006 before being appointed to the KCC in June. Moffet was appointed in 2004 and Wright in May.

Westar is using a procedure adopted in 2003 by the Legislature as a means to encourage alternative energy development. It allows utilities to file a request with the KCC to increase rates that would be used to recover costs of constructing wind or other energy sources.

Technical hearings are scheduled for three days next week, with a decision to be announced by Dec. 31.

If approved, Westar would move forward with three wind projects, then return to the KCC for a formal rate increase request.

Springe said the law requires the KCC to approve the request. His concern is that the amount Westar is seeking is too high compared to the increase needed if Westar purchased wind power from other sources.

Westar’s filings with the KCC estimate monthly residential bills would increase between $2 and $2.50. Springe argues the rate could be closer to $4 a month, when factoring in a rate of return for Westar shareholders.

State policy has advocated the least expensive form of power for Kansans, though federal reports estimate wind power will remain more expensive than coal, natural gas and nuclear power.

Springe said the expedited nature of Westar’s request and disclosures made CURB’s filing necessary. The KCC’s policy in wind development and cost recovery will set the stage for future projects. Allowing Westar the more expensive alternative of owning the wind turbines turns the policy on end.

“The board is not suggesting that they can’t recover the wind cost. We believe the decision to purchase power is cheaper than to own it. We support wind power, but want it to be acquired in the cheapest manner,” Springe said.

In May, Sebelius held a news conference with Westar and other utility officials announcing an agreement to voluntarily commit to getting 10 percent of the state’s energy from renewable sources by 2010, and 20 percent by 2020.

Haines said he and others would “do their share” to reach those goals, provided they could recover the costs.

Lt. Gov. Mark Parkinson has continued to meet with Westar and others to discuss energy issues, according to documents filed with the KCC. Parkinson has been leading the administration’s efforts to develop its energy policy.

By John Milburn
The Associated Press

cjonline.com

28 November 2007