I am pleased to hear that you do not want the issue of fair electric rates to polarize our two communities. Neither do I. Perhaps correcting the numerous myths and misstatements about electric rates and Wichita’s negotiations with Western Resources will help.

The City of Wichita does not advocate an increase in KPL rates, although it is not disputed that KPL requires new generating units. The City of Wichita has made numerous proposals to the Kansas Corporation Commission for bringing about fair electric rates for all Western Resources customers. Not a single one of the proposals offered by us ever called for an increase in KPL rates. While our case at the Federal Energy Regulatory Commission (FERC) could have that effect, it was only filed as a last resort.

Claims that KPL customers only use power from coal-fired plants, while KGE customers use all the power generated by the Wolf Creek Nuclear Plant are fiction. KPL and KGE are operated as a single, integrated utility. This means the Wolf Creek Nuclear Power Plant, which is the reason for the higher KGE rates, benefits all Western Resources customers and stockholders, including those who live in Topeka. The Kansas Corporation Commission, the Kansas Court of Appeals and even Western Resources Chairman David Wittig have all confirmed this fact in written rulings and testimony.

KPL buys power from KGE at below market rates, and far, far below the cost of Wolf Creek, which only KGE customers pay for. The simple fact is that Wolf Creek helps keep KPL’s rates low and, without it, KPL’s rates would be higher. This is documented. So, Mayor Wagnon, the next time someone tells you the Wolf Creek Nuclear Power Plant only benefits Wichita, you will know better and be able to help stop the continuation of that myth.

You are asking the City of Wichita to withdraw its complaint filed with the Federal Energy Regulatory Commission and allow the Kansas Corporation Commission to deal with the issue. But your assertion that the FERC has no jurisdiction over the matter is wrong. The FERC has already acknowledged its authority over this issue by accepting the case.

Wichita has been forced to take this action at the federal level because Western Resources and the Kansas Corporation Commission have not fully addressed the problem. The Kansas Corporation Commission has acknowledged the rate disparity is a problem, but it still refuses to address the issue in a timely way. In its order on the proposed Western Resources/KCPL merger, the KCC ruled that rate disparity could be talked about in the next rate case four or five years from now. The refusal of the KCC to correct a problem it admits exists and is unfair, is forcing us to pursue the matter at the federal level.

Since 1992, when KPL and KGE merged to form Western Resources, residents and businesses in the City of Wichita have paid $700-million more for electricity than they would have had they paid the rates KPL customers pay. These excessive payments are unfair in light of the fact that KPL customers also benefit substantially from Wolf Creek and the other facilities that only KGE customers pay for. If the State of Kansas is to prosper, all communities in Kansas must prosper. That won’t happen to the degree it should if some Western Resources customers are saddled with unfair rates for facilities and electricity which benefit all Western Resources customers.

You claim the settlement negotiations at FERC are unproductive. I believe the settlement negotiations between the City of Wichita and Western Resources are productive and progress is being made. This is the second time you’ve claimed settlement talks involving fair electric rates are unproductive. During the Western Resources merger hearings, the City of Wichita, Western Resources executives and Kansas Corporation Commission staff were close to an agreement which would have significantly reduced the rate disparity without increasing KPL rates. It was your intervention into those settlement discussions which caused the pending deal to collapse.

Mayor Wagnon, your statement that, "Wichita was not seriously negotiating," is inaccurate. Our discussions with Western Resources representatives are very serious. Unfortunately, we did not get the chance to discuss any proposals with you at the settlement conference because you broke off the talks and walked out. If you are serious about negotiating, you need to start talking to us and stop waging a public campaign to undermine the settlement efforts.

Last year, 85,000 KGE customers signed petitions urging the Kansas Corporation Commission to end the unfair electric rate structure. Kansas citizens realize charging one set of customers higher rates for electricity which benefits all Western Resources customers is unfair. You claim the FERC complaint is creating division and distrust between our two cities. I hope that changes now that you have a better understanding of the situation. I hope you will now base your decisions and statements on facts, not fiction.

Sincerely,

Bob Knight
Mayor
City of Wichita