Kansas’ largest electric company still plans to pursue three wind-power projects, although it says an order from state regulators will prevent it from investing in additional wind farms.
Westar Energy Inc. had hoped regulators would allow it to earn higher profits because of its investment in 295 megawatts of generating capacity from wind farms in three counties. That’s enough to power 88,000 homes.
The Kansas Corporation Commission said that the Topeka-based utility’s plans were prudent and that it would be allowed to recover up to $282 million in construction costs through its rates once the wind power starts flowing next year. But the commission refused to increase the profits Westar can earn as a regulated monopoly.
Westar had said it would pursue projects for an additional 200 megawatts of wind-generated capacity. But Bill Moore, the utility’s president and chief executive officer, said Friday that those plans were on hold indefinitely.
“We are concerned about the uncertainty introduced by the commission’s decision,” Moore said. “We don’t see the order encouraging the future development of wind energy in Kansas.”
Westar’s announcement came as Gov. Kathleen Sebelius is promoting renewable energy, particularly wind power. In May, she and utility executives announced a goal to have wind and other renewable resources account for 10 percent of the state’s generating capacity by 2010 and 20 percent by 2020.
In October, Rod Bremby, her secretary of health and environment, rejected a construction permit for two coal-fired plants in southwest Kansas. He cited their potential carbon dioxide emissions and dangers posed by global warming.
But Kansas Corporation Commission spokeswoman Rosemary Foreman said the regulatory agency didn’t think its order should discourage the development of wind power. She said that parts of the order Westar disliked were efforts by the commission to ensure proper oversight.
“It truly is a way to actually just allow the company to move forward with their proposal while assuring, through a review in a couple of years, that the project is continuing as proposed and in the best public interest,” she said.
The company wanted the commission to permit it to earn an additional 1 percent return.
Westar spokeswoman Gina 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.
By John Hanna
28 December 2007
|Wind Watch relies entirely
on User Funding