Jun. 30--If Westar Energy's electric rates are equalized, southern Kansas residents -- including in Wichita -- would pay about 3.1 percent more, while rates would drop about 3.4 percent for northern residents, according to a consultant hired by the state's consumer advocacy agency.

Large industrial users in the southern part of the state would see their power bills rise about 10.5 percent, while similar users in northern Kansas would see power bills drop about 9.8 percent, according to Andrea Crane, a consultant to the Citizens' Utility Ratepayer Board.

The Kansas Corporation Commission is scheduled to decide this fall whether to combine rates across the two divisions that make up Westar, the state's dominant utility, which has 675,000 customers.

The commission has scheduled a series of public meetings and hearings next month to allow consumers to learn about the proposal and make their views known.

After a decade of opposing electric rate parity between southern and northern Kansas customers, CURB, Westar Energy and the Kansas Corporation Commission staff are advocating for a single set of rates for north and south.

And, in a role reversal, it is now Wichita-area interests --primarily aircraft manufacturers -- that are arguing for keeping the current system of different rates.

Customers of Westar's northern division, formerly Kansas Power & Light, have traditionally paid less for electricity than customers in the southern division, formerly Kansas Gas and Electric.

When the companies merged in 1992, they kept separate rate structures so the northern customers wouldn't be burdened with paying for construction-cost overruns at the Wolf Creek nuclear power plant at Burlington, the main power plant for the southern division.

But rising fuel costs for the coal that primarily powers northern Kansas changed the equation.

Nuclear fuel costs have remained largely stable. Southern division customers are enjoying a benefit from their nuclear plant and now pay slightly lower rates than their northern counterparts, according to analyses by parties to the commission case.

Kansas Industrial Consumers -- a coalition of big-business electricity users including Cessna Aircraft, Spirit Aerosystems and Hawker Beechcraft -- argues that it would be unfair to equalize rates right now.

"After the South customers have endured significantly higher rates than North customers for many years following the merger, is it now fair that shortly following South's rates falling below North's rates, that the South's rates be raised through consolidation?" KIC consultant Jim Dittmer said in testimony filed to the commission.

KIC forecasts that consolidation would saddle southern customers with costs they shouldn't have to pay, especially if the federal government carries through with plans for a tax on power-plants' carbon emissions.

Dick Rolfs, Westar's retail rates director, contends in his testimony that a carbon tax would "not necessarily" make northern Kansas rates higher than southern rates.

Westar is projecting that in coming years, Wolf Creek will need about $500 million in upgrades and repairs, while the La Cygne coal plant, which provides some of the Southern Division's power, will need pollution-control upgrades.

Westar and CURB officials say the time to consolidate rates is now, while rates are roughly similar north and south.

Westar also contends that it is now a single, unified power system and it no longer makes sense to split its rates.

Reach Dion Lefler at 316-268-6527.

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