Page 8
University Daily Kansan, February 22, 1984
J
Wolf Creek
continued from p.1
"It is a means of using up a lot of profits that aren't real," he said. "You could call them fake profits."
Paying dividends in this manner is not a serious problem if a utility does it for one or two years.
Larry Funk/KANSAN
BURLINGTON — Businesses along Neosho Street, the main street in town, have prospered since construction began on the Wolf Creek nuclear plant in 1977. Last year alone, the plant
Legislators worry about high rates
"But if they keep it up over a long period of time, it can cause problems," he said.
The push from KG&E and KCP&L for rate increases has raised concerns among members of the Legislature who are worried about the effects of increases on their constituents and about the effects statewide if the companies are hard hit by financial losses.
Wilson Cadman, president of KG&E, has asked for assurances from the Legislature that it would not pass any future legislation to change the five-year rate plan presented to the KCC.
A bill now before the House Energy and Natural Resources Committee would give the KCC power to severely limit rate increases for Wolf Creek — even to the point that it would need to open the plant. Forty-six members of the 125-seat House sponsored the bill, which was introduced Feb. 9.
"I don't think the lights would even flicker," he said. "Since the 1980s there are many instances of companies going into receiverships. When this has happened, investors have lost a lot of money and sometimes so have creditors, but not customers.
"KG&E has invested 150 percent of their net worth without any prior indication that Wolf Creek would go on line. Anytime you bet the store there's a chance you might lose it. I'm much more concerned about the effect on the ratenavers."
State Rep. Bob Vanerum, R-Overland Park and the bill's author, said he thought electricity would not be interrupted if Wolf Creek took one or both of the companies under.
Vancrum said his bill wasn't intended to drive either of the companies over the financial brink.
brought about $9 million in taxes to Coffey County. Workmen building the plant regularly spend money in town businesses, and the plant has provided jobs for many of the 2,700 residents.
out, nee said, "It, to treat the ratepayers fairly, we have to force them into bankruptcy, then we have to force them into bankruptcy," he said.
"I don't think anyone wants to see this happen, but it may happen."
State Sen. Paul Feleciano, D-Wichita, said that other similar legislation being considered
would protect KG&E and KCP&L from bankruptcy because the KCC's powers over rate increases would be expanded.
The legislation we have put together grants as much flexibility as possible to the KCC to ensure that we can work with it.
"It definitely would not be in the best interests of the utilities or the state for them to go bankrupt. Nobody wins when a company goes belly-up."
Some rates could double
For KG&E customers, electric bills could double if the KCC approves the company's five-year plan to phase in the cost of Wolf Creek.
K&G,E, based in Wichita, serves about 235,000 retail customers in southeast Kansas and metropolitan Wichita. KCP,L based in Kansas City. Mo. serves mainly the Kansas City area.
Without the increases, those customers might have to contend with prospect of no electricity.
Haden said the KCC did not anticipate that either KGEE or KCPK&L would go bankrupt. But if Wolf Creek forced either company out of business, Haden said, the effects on the state and customers would depend upon how serious the financial problems for the companies were.
The companies could file under Chapter 11 of the federal bankruptcy laws if their financial problems were not extensive. Under Chapter 11, a company's creditors cannot collect debts while the company is reorganizing, and employee contracts are nullified. More serious financial problems could force the utilities to liquidate under Chapter 7 of the bankruptcy laws.
Haden said customers probably wouldn't go without power if the companies filed under
But if either of the companies filed under
"I wouldn't anticipate there would be any interruption in service," he said.
Chapter 7, he said, customers might find themselves without electricity.
"It they went bankrupt to the point that they couldn't pay their employees' salaries, then it was a crisis," she said.
"Initially there probably would be no difference," he said. "The day after they declared bankruptcy you probably would not see any interruption in service."
"Over a period of weeks and months the problems would probably mushroom," he said. Haden said that companies could reorganize several ways under the federal bankruptcy laws.
But in time, he said, employees would not be paid and equipment would break down and not be repaired. Once that happened, electricity soon would be interrupted.
"Ultimately someone would have to step in and take control," he said. "Whether that would be an out-of-state conglomerate or an in-state company, I don't know."
This is the second in a series of four stories. Tomorrow the Kansan will look at how concern for acid rain caused by coal-fired plants has led to the development of nuclear energy.
continued from p. 1
Rates
The bill would prohibit the costs of excess production from being included in consumers' rates. It would also require a rate phase-in of 10 to 15 years, if the KCC concluded that the plant was generating more electricity than its customers needed.
SIMPSON DREW applause from onlookers when he urged the committee not to "save the face of executives who bet the company" or "bail out a faceless bondholder," but to help Kansas consumers.
"The retired Kansan on a limited fixed income and the struggling Kansas farmer should not have to bail out Wall Street bankers and brokers, foreign note holders and the stockholders of KG&E and KCP&L — many of whom live far from our borders and think of Kansas only when the Wizard of Oz reruns on their television screens." Simpson said.
On Monday, KG&E unveiled a rate plan that would phase in the costs of building the plant over five years. By the end of that five years, electric rates would increase 95.4 percent
YESTERDAY BRIAN MOLINE, a KCC official, said the KCC supported a bill it drafted that would affirm the KCC's power to exclude from consumers' rates a portion of equipment or of a plant that was now not being used to serve customers.
John Myers, a spokesman for Gov. John Carlin, told the committee that the governor did not favor any specific measure. However, he said the governor supported legislation that would provide the KCC with maximum flexibility to exclude from the rate structure portions of power plants that the commission determined to be excess capacity.
He said that the governor wanted to ensure that the KCC had authority to protect consumers against the cost of generating capacity they did not need and could not afford.
"THE GOVERNOR believes that unions and their investors should not be held harmless from financial responsibility for excess capacity at the expense of Kansas ratepayers." Myers said. A spokesman for a Wichita group called Kansans For Fair Electricity told the committee that the bill by House members would give the KCC the necessary tool to protect consumers "if it is determined that Wolf Creek will result in large excess capacity or if significant Wolf Creek costs are due to mismanagement by KG&E or KCP&L."
TOGA, TOGA, TOGA!!!
Toga party at Ronnie's
Thurs. Feb. 23
7-11 p.m.
If you come dressed in a toga . you get 1/2 price well drinks and are eligible to be in the "Best Toga Contest!" Live entertainment Friday and Saturday night!
The Jetz
A PRIVATE CLUB
530 WISCONSIN LAWRENCE 749-3891
Muscular Dystrophy
Dance All Night! March 24, noon to midnight Beer, Prizes, and Fun
KU SUPERDANCE'84
EVERYONE WELCOME!
To find out more, come to informational meetings Wednesdays at the Kansas Union, or stop by the Wescoe booth from 10 a.m. to 2 p.m.
Knights of Columbus Sponsored by Panhellenic
Thurs. Feb. 23
8:30 p.m.
beer and other refreshments will be sold
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Ham | 1.19
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