8.5 Electric Rate Policy CITY OF SALINA
REQUEST FOR CITY COMMISSION ACTION DATE TIME
9/11/00 4:00 P.M.
AGENDA SECTION: ORIGINATING DEPARTMENT: APPROVED FOR
AGENDA:
NO. 8 CITY MANAGER
ITEM 5 ~
NO. BY: Dennis M. Kissinger BY:
Item
Resolution No. 00-5645
A RESOLUTION ESTABLISHING CITY POLICY CONCERNING ELECTRIC RATE ISSUES BETWEEN
KANSAS POWER AND LIGHT & KANSAS GAS & ELECTRIC SERVICE TERRITORIES.
Background
For some time this year, city staff has been monitoring the complex issues involved in the efforts of areas
in south-central Kansas to challenge the current electric rate structure of Western Resources. The City of
Wichita has initiated rate complaints through federal and state regulatory agencies. Their goal is "rate
parity" between the electric service territory served by Kansas Gas & Electric (KGE), (generally the
Wichita area), and the Kansas Power & Light (KPL) territory (Topeka, Lawrence, Manhattan, Salina,
Hutchinson). Wichita/KGE rates are substantially higher than KPL areas due to the KGE Wolf Creek
nuclear power plant costs.
The City of Topeka has for many months assumed the lead role in representing the KPL area interests.
This role has included incurring costs in representing all KPL communities' interests before the Federal
Energy Regulatory Commission (FERC).
In recent weeks, as the issues and federal/state forums have become more clear, Mayor Joan Wagnon
and Topeka's legal counsel for this issue have been visiting other KPL communities to share information
and request support from those city and county governments. Mayor Wagnon met on August 28 in
Salina with Mayor Jilka, Commissioner Mathews and city staff regarding this important matter.
Subsequently, Mayor Jilka wrote a preliminary letter of general support, to be followed by City
Commission consideration of a formal policy resolution. At this point, nearly 50 communities, including all
the largest KPL-served cities have provided letters or resolutions of support to Topeka on this matter.
In addition to the briefing attended by two Commissioners, staff has previously provided a memo and
background information. The City Commission also received with this agenda item a videotape of the
public forum/panel discussion held by the Manhattan City Commission.
The latest information on this issue is outlined in the enclosed September 7 article from the Hutchinson
News. It appears this matter will go to trial before a FERC judge in Washington, then ultimately to the full
FERC. Mayor Wagnon indicated in our meeting here, as well as in other KPL community meetings, that
Topeka may in the future request some financial support from KPL communities for the FERC hearing
efforts. No requests have been made at this point, and any funding requests will be brought to the City
Commission as a separate issue from this Policy Resolution.
Action:
Consider Resolution 00-5645 establishing city policy on these electric rate issues.
Enclosures
Hutchinson News Page 1 of 2
s cnoss Electric-rate dispute to go to federal
FRONT PAGE .... A1 trial
Lo~ ............. A2
REGIONAL ....... A3
0P~ION .......... A4 By Mary Clarkin
0BITUA~ES .... A4
The electric-rate showdown be-tween the cities of Wichita and
SPORTS .... ....... BI Topeka will be played out in the nation's capital.
~s~ ...... C 1
THAT'S LIFE ..... !)1 "We're going to trial," said Topeka Mayor Joan Wagnon
ASSOCIA~D PR~S in a telephone interview Wednesday afternoon from
E~... Washington, D.C.
PA~ ISS~S
The Federal Energy Regulatory Commission thought the
AP ~CKl~ settlement conference in Washington could run two days.
S£A~CX
ADVERTISER IND~ But it ended after about two hours Wednesday morning.
Co~rrACX Us
"It didn't take very long before the talks broke down, and
the judge (the FERC's Curtis Warner Jr.) announced we're
at loggerheads," Wagnon said.
Now, a trial before another FERC judge looms, with the
city of Wichita pursuing its complaint against Western
Resources Inc., while the city of Topeka will insert itself as
an intervenor arguing against Wichita's argument that the
costs of Wolf Creek Nuclear Power Plant be shared.
Wichita lies in KGE territory in south-central Kansas,
where power rates are about 25 percent higher than in the
KPL region that includes Topeka and Hutchinson and
northeastern Kansas. The 1991 merger of KGE and KPL
created West-erA Resources Inc., so the utilities have the
same parent.
Topeka's chief argument is that a Kansas Corporation
Commission order at the time of the merger directed that
KPL customers not be burdened by the cost for Wolf Creek.
Wichita Mayor Bob Knight claims that Wolf Creek is the
reason for their hi~her KGE rates but the Burlington nlant
http ://www.hutchnews.com/days/thursday/local/local6.html 9/7/00
- Hutchinson News Page 2 of 2
benefits all Wester~ Resources'customers and sto~khoiders.
Wagnon has described the KPL-KGE rate debate as
"potentially one of the biggest, most divisive issues" seen in
Kansas since property reappraisal and school finance
formulas.
Topeka has borne travel and legal costs as it has
spearheaded the fight in KPL territory. Wagnon said she
probably would be asking other communities in the region
to help pay the expenses to bring expert witnesses to the
FERC trial.
Attorneys for the parties will confer in a couple of weeks.
A date for the trial must be set. Ultimately, the judge will
make a recommendation, and the matter will go on to the
full FERC.
Efforts to reach Knight and Wichita legal counsel Gary
Rebenstorf were unsuccessful.
Topeka, the KCC and Western Resources all preferred to
avoid the FERC trial that lies ahead, focusing instead on the
rate case that will be filed in Topeka with the KCC on or by
Nov. 29.
Wichita, displeased with the KCC reaction to the rate
disparity, wanted the FERC trial.
Copyright 2000 The Hutchinson News
http://www.hutchnews.com/days/thursday/local/local6.html 9/7/00