KCC approves settlement agreement in Kansas Gas Service rate case

TOPEKA - Today, the Kansas Corporation Commission approved a settlement agreement in the Kansas Gas Service (KGS) rate case. Under the agreement, the $58.1 million net revenue increase originally requested by KGS was reduced to $35 million. The bill impact to residential customers, with average usage, is an increase of approximately $3.83 per month or $46.02 per year. The new rates will take effect on November 1.

The company withdrew its proposal to implement two different rate structures based on high or low usage. That proposal, which was opposed by KCC staff and the Citizens Utility Ratepayer Board (CURB), would have resulted in a residential rate increase of approximately $6.71 per month for customers using 73 Mcf or less per month or $9.48 more per month for those residential customers using more.

A proposal to implement a performance-based ratemaking mechanism to annually adjust rates was also withdrawn by KGS after facing opposition from KCC Staff and CURB.

In its March application to increase rates, KGS noted it had been five years since its last rate case and the company had invested $600 million in capital expenditures necessary to provide safe and reliable service to customers.

In testimony filed in support of the settlement approved today, KCC staff stated that the agreed upon revenue increase strikes the proper balance between KGS' desire for reasonable assurances that it will meet its financial obligations and the need to keep rates as low as possible for customers while still providing reliable natural gas distribution service.

The settlement agreement was filed with the Commission in early August. An evidentiary hearing, allowing the Commission to question the parties about the proposal, was held on August 13. Today's order is available for viewing here.