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Midwest looking to boost control

By MIKE CORN

mcorn@dailynews.net

It's a cumbersome task, taking a multitude of issues and requests for rate increases to the Kansas Corporation Commission.

Hays-based Midwest Energy wants to change all that and soon will be asking its member-customers to vote on a proposal allowing for self regulation.

Midwest spokesman Mike Morley said the cooperative's members will be protected along the way and always will have the option of taking a rate increase to the KCC.

Besides, Midwest Energy contends it is only one of two Kansas cooperatives still fully regulated by the KCC.

A series of informational meetings already are under way, with one Thursday in Colby.

Meetings also are planned for Tuesday in the Scott County Library and Thursday at Robbins Center on the Fort Hays State University campus. Both meetings will be at 6:30 p.m.

Electric cooperatives have had the ability to vote themselves out from under KCC review since 1992, Morley said, but Midwest Energy didn't have that authority because it also supplies natural gas to parts of northwest Kansas.

Last year, Midwest Energy asked legislators to change the 1992 law to let it seek self-regulation.

With the change in the law, Midwest now has moved forward and soon will send ballots to customers. The ballots have to be returned by May 10 to be counted.

Morley said the move will let Midwest Energy exercise local control with rates decided by its board, all of whom are customers.

"We feel this board is better than a regulatory board in Topeka," Morley said.

The move will increase efficiency.

"It's a very complicated and expensive process that can take years," Morley said of working through the KCC's regulatory process.

He pointed to the How$mart program as an example, saying it took nearly 18 months to get it approved. It now is widely popular and has been imitated by utility companies across the nation.

In the event of a rate-increase proposal, Midwest would schedule meetings in Great Bend, Colby and Hays for electric rate increases and Colby, Hays and Scott City for natural gas increases.

Members also would be notified at least 20 days in advance of the meeting when its board will take action on the proposed rate hike.

That board meeting would be open to the public, but it would be the only one. Morley said board meetings typically aren't open, although a member can make a written request to the chairman to attend.

"Board meetings are not normally open," Morley said in an email, "allowing the board to discuss commercially sensitive matters and specific customer issues."

There are nine board members.

"We have to make that meeting open to the public," he said of any rate-change meeting.

Midwest, he said, spends approximately $300,000 a year on compliance issues involving KCC and the Citizens Utility Rate Board, a group set up to serve as an advocate for ratepayers.

A rate increase, Morley said, can add $200,000 to the mix.

"Under self regulation, you can negate most of that," he said of the cost.

Board members will serve as advocates of the customers, or there's still the chance to force a review of a rate hike by the KCC.

Those rules, Morley said, are contained in state law. He didn't have details of how that process works, saying only it's contained in state statutes.

Customers also can circulate a petition forcing a utility back under the supervision of the KCC.