Kansas Gas Service has requested the Kansas Corporation Commission for approval to raise rates of customers who are being served by the Calista Compressor Station in Kansas.
During a meeting on Thursday evening, Kansas residents expressed their concerns to utility regulators and executives regarding the proposed increase in natural gas rates. Many residents believe that such an increase is unnecessary and unfair, especially given the current struggles that families are facing due to inflation.
Kansas Gas Service customers engaged in a heated discussion for approximately an hour, expressing their doubts regarding a proposed increase and asserting that the company was seeking to increase its profits without providing any real value to its customers.
Beverly Jensen LaBonte, whose husband is employed by Kansas Gas, expressed her concern about the excessive profits and greed of the utility. She emphasized that the high prices are unaffordable for many people.
Kansas Gas Service, the largest natural gas utility in the state with 648,000 residential customers, has recently filed a request with the Kansas Corporation Commission. The request proposes an increase in the base rates charged to customers, which is expected to generate an additional $58.1 million annually. In addition, the surcharge for gas reliability is also expected to increase, adding another $35 million to the company’s revenue.
Kansas Gas Service is considering implementing a new rate structure that would allow customers to choose between two different rate options based on their gas usage. Those who use less than 73,000 cubic feet per year would be subject to a 10.41% rate hike, which would translate to an increase of about $6.71 per month. Alternatively, customers who use more gas would face a slightly lower rate increase of 8.25%. However, the higher usage associated with the latter option means that bills could increase by as much as $9.48 per month.
Kansas Gas Service, being a monopoly utility, is obliged to demonstrate the reasonableness of their rates and gain approval from regulators before any rate increase. Generally, public utilities pursue rate cases to recover their investments in equipment or facilities.
During the Kansas Corporation Commission’s initial public meeting regarding the rate increase, Robert Vincent, the attorney for Kansas Gas Service, stated that the company was seeking the modification to improve its return on the investments made in the gas distribution system. Currently, the company generates approximately 2.61% on these investments.
In a clear and concise statement, he expressed, “We believe that the scales we are attempting to balance have become imbalanced, and we must modify our rates to ensure equitable returns while simultaneously guaranteeing that our services remain affordable for our customers.”
According to a statement submitted to the Kansas Corporation Commission, Sean Postlethwait, the Vice President of Operations for the company, has stated that they have invested over $600 million to provide their customers with secure, cost-effective, and dependable natural gas services since their previous rate case.
During the hearing, customers expressed their dissatisfaction with the idea of raising rates to increase the profit margin for Kansas Gas Service. The proposal was met with opposition from customers who were not in favor of such a move.
Jonathan Smith pointed out that those who make the decision to raise utility rates have no idea how it affects people who have to figure out how to pay the increased bills. He also mentioned that executives at Kansas Gas Service earn over $1 million annually.
According to Smith, Kansas Gas Service had to tighten its own belt a bit.
Smith admitted, “I didn’t realize it was my responsibility when someone had overspent on administrative costs and debt financing.”
As the executive director of the Citizens’ Utility Ratepayer Board, David Nickel has been closely reviewing the rate case and preparing for his testimony. He expressed concern about the significant increase in customer charges and the dual rates, but CURB is still studying the details to provide a more comprehensive analysis. The organization advocates for the rights of residential and small commercial utility customers, and Nickel is determined to ensure that their interests are fully represented.
The Kansas Corporation Commission (KCC) has set a deadline of July 1 for the staff of KCC, CURB, and other concerned individuals to submit their testimony regarding the proposed rate hike. Additionally, members of the public can share their written comments via the KCC’s website until early August or send it to the commission’s address at 1500 SW Arrowhead Road, Topeka, KS 66604-4027. Moreover, they can also contact the commission at 800-662-0027 to voice their concerns.
The second public meeting of the KCC is scheduled to take place on Monday at 6 pm in the Lowe Auditorium at the Hughes Metropolitan Complex in Wichita. If you are unable to attend the meeting in person, you can still participate by registering to attend via Zoom before noon on Sunday.