The Kansas State Corporation Commission (SCC) has authorized Western Resources, Inc., a local distribution company (LDC), to raise base rates by $33.85 million, but to refund to ratepayers a portion of its gain on the sale of distribution assets sold to a municipality.
Citing guidelines handed down by the state Court of Appeals in a 1980 ruling (5 Kan App.2d 514), the SCC approved a sharing mechanism that allocates ratepayers 44.4 percent of the gain over a one-year period. Specifically, the SCC applied the following guidelines: 1) risk of loss on investment capital, 2) contribution by customers to the value of the property, 3) financial integrity of the company, 4) increase in the value of the property due to inflation, and 5) increase in the value of the property due to improvements in the neighborhood of the facilities sold. Re Western Resources, Inc., Docket No. 193,305-U, April 15, 1996 (Kan.S.C.C.)
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