KCC denies request that would've cost Westar customers about $93 million
The Kansas Corporation Commission Thursday denied a request from Westar Energy that would've cost its customers about $93 million.
The request called for Westar's customers to bear the cost of the company's seven-month lease and subsequent purchase of an 8-percent interest in Jeffrey Energy Center (JEC), located near St. Mary's.
"Had it been approved, the cost to ratepayers would have amounted to approximately $93 million in increased rates over the next 15 years," the KCC explains.
In rejecting Westar's request, the KCC says Westar failed to meet its burden to show that the lease and purchase agreement "was a prudent decision for its retail customers and that Westar entered into the agreement knowing it did not need the 8 percent portion of JEC to satisfy its capacity requirements and the settlement agreement would increase customers' rates."
Prior to Westar's August purchase of the 8-percent interest in JEC, Westar and Kansas City Power & Light owned 92 percent of the center. Midwest Power Company owned the remaining 8 percent and leased that percentage to Westar, the KCC explains.
The KCC says the power generated from this deal was sold to Mid_Kansas Electric Company through a Power Purchase Agreement.
"The lease and purchase agreements both expired on Jan. 3, 2019. Westar then opted fro a new lease and subsequent purchase of the 8 percent and asked the Commission to approve the recovery of costs through its Retail Energy Cost Adjustment (RECA) which is included in customer rates," the KCC says.