Western Resources is requesting a $151-million electric rate increase, but KCC staff who have reviewed the request and examined the companies operations say Western Resources should be made to cut rates by $92-million.

The following is Mayor Knight’s testimony to the Kansas Corporation Commission:

Chairman Wine…Commissioner Claus…Commissioner Moline…Welcome to Wichita.

The last time you held a public hearing here was over three years ago…in January of 1998…

As you might recall…I delivered to you the signatures of 85,000 citizens asking for your help in ending the oppressive and unjustified electric rates charged by Western Resources.

Commissioners…they are still waiting.

But I assure you, the delays in dealing with this issue have not dampened the determination of those citizens and many others to obtain justice and fairness regarding the electric rates charged by Western Resources. The 350,000 citizens of Wichita expect the people they elect to protect the public interest. They expect the same from you because you are appointed to be guardians of the public good.

As the State officials charged with protecting consumers from unfair and unscrupulous practices, you need to assure ratepayers that you can sort out the facts of this rate hike request from the fiction. That is a difficult task, because Western Resources executives are masters of fiction. They have mastered the ability to twist and obscure the facts through technical mumbo-jumbo, myths and misstatements. On behalf of the 350,000 citizens of Wichita and the additional hundreds of thousands of people who live in South Central Kansas, I am asking the Kansas Corporation Commission and its expert staff to be as good at debunking the myths as Western Resources is at creating them.

There is reason to believe your professional, expert staff has sorted out the fact from the fiction. Instead of agreeing with the $150-million rate hike Western Resources is requesting, the KCC staff is recommending a $92-million rate reduction. The testimony filed last week by the staff is positive news for the hundreds of thousands of Western Resources customers in Wichita and South Central Kansas. And it should be positive news for the citizens of Topeka and the other Western Resources customers in the rest of Kansas.

For several years, I have argued the rate disparity between the KGE and KPL service areas of Western Resources is unfair and unjustified. I’ve also said the rate disparity can be ended without raising the rates of KPL customers.

The testimony filed by the KCC staff confirms these statements. The recommendation of the staff nearly eliminates the rate disparity by reducing KGE rates but holds KPL rates virtually the same. I view the KCC staff testimony as a win-win situation for all customers of Western Resources whether they live in Wichita or Topeka.

The City of Wichita, in its testimony, has identified an additional $34-million in rate reductions for KGE customers. Our analysis focused only on areas dealing with the rate disparity imposed on KGE customers. We did not attempt to address all aspects of the rate case or examine all aspects of Western Resources’ business practices and management. The Kansas Corporation Commission staff obviously did examine all aspects of the rate increase request, which is why its recommendation calls for a much higher rate reduction than our testimony proposes.

The important thing to note, is that no group who filed testimony regarding the rate case believes a rate increase is justified. Except, of course, Western Resources, but with the companies longstanding practice of charging unfair and unreasonable rates, that’s not surprising.

Residents of this community and region have asked and continue to ask me lots of questions about electric rates and the proposed Western Resources rate increase. They are questions I cannot answer.

Residents have asked and continue to ask me questions about Western Resources and the way its executives are running the company. Again, they are questions I cannot answer. But you are the State officials charged with regulating monopoly electric utilities and I promised citizens I would carry their questions to you. I believe you should be able to provide the answers to these questions.

• Why do customers of Western Resources have to pay higher electric rates than the residents in all of our neighboring states including Missouri, Oklahoma, Colorado and Nebraska?

• Why do residential and small business customers who have the lowest demands for electricity have to pay the highest rates?

• Why is Western Resources allowed to sell electricity to other utilities at a fraction of the price it charges residential and small business customers who have paid for the generating assets?

• Why do customers of Western Resources have to live with the threat of brownouts and blackouts while the company sells electricity to out of state utilities?

• Why do the customers of Western Resources in Wichita pay 12.3-cents per kilowatt hour for street lighting while Western Resources customers in Topeka pay only 7.2-cents per kilowatt hour for street lighting? Why are Wichita citizens charged 70-percent more for street lights?

• Why have the customers of Western Resources in Wichita been forced to pay between $700 and $800-million more for electricity since the merger ten years ago than the customers of Western Resources in Topeka when both cities are served by electricity from the same set of generating plants?

• Are customers of Western Resources paying for executive perks and privileges such as multi-million dollar salaries, multi-million dollar mansions and corporate jets?

• Why do customers of Western Resources have to pay for the wining and dining of politicians and officials, bad business decisions such as the failed attempt to buy Kansas City Power and Light and the poor decisions involving Protection One?

• Why are the captive customers of Western Resources responsible for bailing out a company which has watched its value plummet, not because of the electric utility, but because of high risk business ventures which have nothing to do with providing electricity?

In a competitive free market system, Western Resources should be allowed to buy and sell utility companies, security alarm companies, even baseball teams, if the stockholders approve. In a competitive free market system, Western Resources should be allowed to pay its executives exorbitant salaries and provide extravagant perks, if the stockholders approve. But in a monopoly system, Western Resources should not be allowed to do those things on the backs of captive customers who have no choice but to pay the price the company charges. Under a monopoly system, any merger or business deal a utility undertakes must benefit the customers.

Western Resources’ proposed rate hike is an appalling display of corporate arrogance and greed. There is strong evidence that Western Resources is already overcharging customers by as much as $100-million a year. There is strong reason to believe Western Resources is not being run in an efficient, effective manner. There is a strong perception Western Resources executives do not have the best interests of ratepayers in mind. To propose a $150-million rate increase is something only a callous monopoly with no threat of competition would even attempt to get away with.

But there is also reason to be encouraged that Western Resources’ reprehensible treatment of its customers through excessive, unfair, unjustified rates will soon come to an end. That’s because the Kansas Corporation Commission staff has sorted out the fact from the fiction. Instead of agreeing with the $150-million rate hike Western Resources is requesting, the KCC staff is recommending a $92-million rate reduction.

The captive consumers of Western Resources, particularly those in the KGE service area, who have been paying unfair rates for ten years, appreciate the diligent work of the staff. We believe it represents the facts of the situation.

I understand you, as Kansas Corporation Commissioners are not bound by the recommendations of the staff and that you will listen to all comments and review all positions before making a ruling. But the expert analysis and recommendations of the KCC staff should heavily influence your decision. The staff is obligated to represent the overall public interest and takes into consideration the needs of both ratepayers and stockholders. They have done that and their recommendation is reasonable, balanced and would finally end the excessive, unreasonable practices Western Resources executives have imposed on us… the citizens of Kansas.

You are not bound by your staff’s recommendations, but in this case, you will be well served if you follow their advice. Hundreds of thousands of citizens across Kansas will be helped by what your staff is recommending. You, as Kansas Corporation Commissioners, have the opportunity to make sure this monopoly utility is operated to serve the hard working citizens who live and work on Main Street Kansas, instead of corporate merger and acquisition specialists who are only worried about what happens on Wall Street.

That’s what this is all about… Main Street versus Wall Street.

Please follow the advice of your staff. We need your help to end the intolerable disregard for fairness and the insufferable economic injustices which have become part of the Western Resources corporate philosophy.