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AARP Kansas Opposes Kansas Gas Service Rate Increase Request

Posted on 10/05/18

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According to the Kansas Corporation Commission (KCC), the application, filed by Kansas Gas Service in June, requests a $42.7 million dollar net base rate increase. If approved, the average residential customer’s natural gas bill will increase by $5.67 per month, an increase of 10 percent. A complete copy of Kansas Gas Service’s application and supporting testimony is available on the Commission’s website.

The following is testimony presented by AARP Kansas Associate State Director Andrea Bozarth before the Kansas Corporation Commission (KCC) on October 4, 2018 in Topeka.

RE: AARP Comments on Kansas Gas Service Rate Increase Request, Docket No. 18-KGSG-560- RTS

Good evening Madam Chair and Commissioners. My name is Andrea Bozarth and I am the Outreach Director for AARP. Thank you for having this public comment hearing.

AARP is a nonprofit, nonpartisan membership organization that advocates for people who are 50 and older, seeking to promote their independence, choice and control in ways that are beneficial and affordable to them and to society as a whole.

AARP promotes the well-being of persons over 50 through our advocacy for fair and affordable utility rates. We support full regulatory review of utility expenditures and we strive to make sure that people are able to remain in their homes and communities.

AARP Kansas has more than 318,000 members across the state, many of whom reside in the Kansas Gas service area. These member households, and all Kansas Gas customers, especially those low-income and those over 50, would be adversely impacted by yet another significant rate increase in their utility bills.

We appreciate how carefully members of this commission consider requests such as the one before you tonight. We know that many hours of deliberation go into your decisions and the overarching impact your decisions have on citizens and the business community.

AARP strongly opposes many aspects of this filing including the establishment of new surcharges (or trackers), as we do around the country. Such single issue ratemaking bypasses the traditional regulatory process to fast track spending recovery. It also shifts more risk to customers without a concomitant lowering of the utility’s return (to reflect their reduced risk). Oftentimes there are offsetting cost reductions that need to be considered in setting rates. With the use of trackers, such offsetting cost reductions are ignored.

We especially oppose establishment of an automatic rate increase mechanism proposed by Kansas Gas (decoupling of sales and revenues which is cleverly renamed a revenue normalization adjustment). Under decoupling, the utility is guaranteed the same amount of revenues regardless of sales. We have opposed such harmful and costly proposals around the country and the KCC should reject it as well.  The utility is not entitled to such protection under the regulatory compact (as in New Mexico).

We also oppose the other new proposed surcharges for cyber security and depreciation. All such costs can be dealt with in the normal regulatory filing process. No new regulatory mechanism is needed for these costs either. Further, the 10% increase for residential customers is too high. We urge the Commission to not allow the utility to unfairly and disproportionately shift cost responsibility to the residential class via a creative picking of a cost study mechanism.

Finally, we strongly oppose the proposal to increase the already-too-high monthly customer charge by $6 per month to almost $23 month. High fixed charges make the consumer’s control of gas bills more difficult and discourage conservation. The current charge is already too high, and increasing it another $6 would make it one of the highest monthly customer charges in the country.

We appreciate the opportunity to comment.

Respectfully,

Andrea Bozarth

If you would like to share your thoughts about how the proposed rate increase will impact you and/or your family, the KCC will accept public comments through 5 p.m.  on December 14, 2018. There are three ways to submit a comment:

1)  Go to the KCC website and click on the “Your Opinion Matters” link to submit a comment.

2)  Send a written letter to the Kansas Corporation Commission, Office of Public Affairs and Consumer Protection, 1500 SW Arrowhead Road, Topeka, KS 66604-4027. Be sure to reference Docket No. 18-KGSG-560-RTS.

3)  Call the Commission’s Public Affairs office at 1-800-662-0027 or 785-271-3140.

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