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Westar South Customers May Pay for North's Co2 Emissions
Sunday, July 05, 2009 3:52 AM


(Source: The Wichita Eagle (Wichita, Kan.))trackingBy Dion Lefler, The Wichita Eagle, Kan.

Jul. 5--If Congress passes legislation to reduce global-warming emissions, Westar Energy customers in northern Kansas could be on the hook for twice as much in rate increases as consumers in southern Kansas, analysts say.

That could become a key issue as the Kansas Corporation Commission ponders whether to equalize the rates for the two regions.

At issue is a plan in Congress called "cap-and-trade," which would force utilities to reduce their emissions or pay extra for pollution credits.

In Kansas, it's like an electric civil war.

The primarily coal-powered north argues that no one predicted utilities would have to pay a premium to fight global warming and it wouldn't be fair to expect their region to shoulder the burden alone.

Southerners say they've faced higher electric rates for years to pay for a clean nuclear plant and it's unfair to expect them to pay for northern Kansas' coal pollution.

North and south have paid different rates since 1992, when Kansas Power & Light merged with Kansas Gas & Electric to form the company now known as Westar.

The rates for Westar's Northern and Southern divisions are divided along the old KPL and KGE boundaries.

Analysts say a cap-and-trade system -- which appears to be the most likely scenario in Congress -- would likely mean higher bills for everybody. But the difference between rates in north and south Kansas could be tens and possibly hundreds of millions of dollars.

Cap-and-trade is the centerpiece of President Obama's efforts to reduce carbon dioxide, a greenhouse gas scientists consider a major factor in global climate change.

The House of Representatives passed a cap-and-trade bill by a thin margin. It now awaits action in the Senate, where negotiators are trying to hash out legislation that can garner a filibuster-proof majority of 60 of the 100 senators' votes.

Rate gap reverses>

The dominant utility in the state, Westar serves about 675,000 customers.

Historically, Westar South customers have paid substantially more for power than their northern cousins.

The reason is that the baseload power plant for Westar South is the Wolf Creek nuclear plant at Burlington, while Westar North's main plant is the coal-fired Jeffrey Energy Center near St. Marys.

For years, Wolf Creek power was more expensive because of the cost of building it.

The plant was originally planned as a virtual twin of Pennsylvania's Three Mile Island nuclear plant. But when that plant suffered the worst nuclear accident in U.S. history in 1979, federal regulators required Wolf Creek to be redesigned and partially rebuilt to take advantage of safety lessons learned.

The result more than doubled the plant's cost, to $1.5 billion. About $700 million of that fell to KGE, which owns 47 percent of the plant.




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