37,000 nat­u­ral gas cus­tomers will get rate re­duc­tion

The Wichita Eagle - - Front Page - BY DION LEFLER dle­[email protected]­chi­taea­gle.com

About 37,000 cus­tomers in the Wi­chita area are get­ting a cut in nat­u­ral gas bills start­ing this month to pass along fed­eral tax re­duc­tions ap­proved about a year ago.

Black Hills En­ergy cus­tomers in Wi­chita will see about a $7.30 re­duc­tion in their Jan­uary gas bill and about a dol­lar a month in the fu­ture.

In to­tal, the com­pany is pass­ing through about $1.7 mil­lion in an­nual sav­ings to its cus­tomers, ac­cord­ing to a state­ment is­sued Fri­day.

But cus­tomers of the much larger Kansas Gas Ser­vice will have to wait for any re­turn from the tax cuts, if it hap­pens at all.

That com­pany, with more than 630,000 cus­tomers statewide, seeks to keep the tax cut for its bot­tom line.

The money comes from a re­duc­tion in cor­po­rate tax rates — from a max­i­mum 35 per­cent down to 21 per­cent — in the Tax Cuts and Jobs Act.

That bill passed Con­gress in De­cem­ber 2017 at Pres­i­dent Trump’s urg­ing.

Last year, the KCC or­dered the state’s util­i­ties to pass the tax sav­ings on to cus­tomers in most cir­cum­stances.

Wes­tar En­ergy and its sis­ter com­pany, Kansas City Power & Light, are al­ready pass­ing those sav­ings along, said David Nickel, con­sumer coun­sel for the Cit­i­zens’ Util­ity Ratepayer Board, the state agency that rep­re­sents res­i­den­tial and small­busi­ness util­ity cus­tomers..

But Kansas Gas, a divi­sion of the Ok­la­homa-based One Gas, is re­sist­ing pass­ing on its sav­ings. The com­pany is in the midst of a rate-set­ting case and con­tends it should get to keep the pro­ceeds from the tax cut.

The com­pany claims that be­cause of other busi­ness costs, it is earn­ing less than the KCC al­lows, and thus should be ex­empt from the com­mis­sion or­der to pass through the tax cut.

“Kansas Gas Ser­vice demon­strated, be­yond dis­pute, it was earn­ing be­low its au­tho­rized re­turn even after ac­count­ing for the tax sav­ings,” the com­pany said in a brief filed Jan. 3.

Kansas Gas orig­i­nally filed for a $45.6 mil­lion per year rate hike, but re­cently ap­proved set­tling with its op­po­nents on a $21.5 mil­lion in­crease, Nickel said.

Keep­ing the tax cut would add an ad­di­tional $14 mil­lion to the com­pany’s bot­tom line, ac­cord­ing to state records.

“In the set­tle­ment agree­ment, the par­ties agreed that Kansas Gas Ser­vice could take ad­van­tage of the pro­vi­sion in the Kansas Cor­po­ra­tion Com­mis­sion’s tax or­der al­low­ing a util­ity to demon­strate through its fil­ing that other costs of ser­vice have more than off­set the de­crease in

the com­pany’s in­come tax ex­penses,” com­pany spokes­woman Dawn Tripp said in an e-mail re­sponse to Ea­gle ques­tions. “Kansas Gas Ser­vice pro­vided this sup­port­ing data in the com­pany’s rate case.”

CURB is ar­gu­ing cus­tomers should get the sav­ings be­cause taxes are an add-on cost that is sup­posed to be passed through to cus­tomers whether they go up or down.

Nickel said the agency is tak­ing the po­si­tion: “You give that dang money back. This is a wind­fall to (Kansas Gas) oth­er­wise.”

The rate case has to be re­solved by the com­mis­sion by Feb. 25.

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