October 28, 2008

Westar Energy Announces $130 Million Rate Case Settlement

US-based power utility Westar Energy has announced that all parties to its Kansas retail rate case have agreed to a settlement. The settlement provides for a $130 million annual increase in rates and addresses other issues identified in the company's rate case filing.

The settlement is subject to the execution by all parties of a definitive settlement agreement and subsequent approval by the Kansas Corporation Commission (KCC).

The settlement represents an overall increase in rates of 11%, which is lower than the company's requested increase of 15%. The settlement does not address the issue of consolidating the rates of Westar Energy North and Westar Energy South. That matter will be reserved for a hearing.

The parties expect to file the executed settlement agreement, which will set forth the terms of the settlement, with the KCC in the next few days.

Among other provisions, the settlement recognizes Westar's significant investment in new generating facilities, including wind energy. However, it requires Westar to forego any incentive return on that wind investment, something the company had again sought in its application.

It also requires Westar to modify the fuel adjustment tariffs to reduce the volatility in customer bills associated with changes in fuel costs. The fuel adjustment tariffs will be changed to a quarterly update rather than the current monthly adjustment, said Westar.