Posts tagged a

Kansas City Power & Light Co. officials were optimistic that 2011 would be the year the economy — and electric meters — started humming along again.

But after six months some troubling figures emerged. the utility’s residential customers were using 4 percent less electricity than a year ago, when the numbers were adjusted for the weather’s ups and downs.

Commercial and industrial electricity use also was down, but just 1 percent.

Frugal homeowners’ conservation measures, such as replacing inefficient furnaces and air conditioners, had something to do with the decline.

But a starker symbol of the troubled economy also played a part: a growing number of vacant, foreclosed homes are using little or no electricity.

“these are homes that were getting bills, and now they aren’t,” said Chuck Caisley, a spokesman for Kansas City Power & Light, which has 725,000 residential customers in Missouri and Kansas.

Despite the decline in electricity usage, customers shouldn’t expect rates to drop. Rates are only partly set by supply and demand. Regulators approve rates for utilities that also cover such costs as adding power plants to meet future demand, costs that must be paid whether usage falls or not.

The latest real estate reports aren’t encouraging to utilities looking for demand to pick up again. a RealtyTrak survey released recently said foreclosure actions were down in August in Missouri but up 18 percent in Jackson County, which had the most foreclosure notices of any county in the state. Foreclosures were up in Kansas, and Johnson and Wyandotte were No. 2 and 3 among its counties, RealtyTrak said.

Moody’s Analytics, in a separate survey, tracks the number of properties that lenders have repossessed and now own. it found that the Kansas City area ranked 25th out of the 384 metropolitan areas it surveys. in the Kansas City area there are 16.3 such properties for every 1,000 households, a rate more than double the national average and nearly three times the Missouri figure, which is 5.8 per 1,000 households.

Utilities have already been crimped by the housing slowdown because of fewer new homes being built. the effect of foreclosures has been more difficult to quantify, and the number of properties standing empty often isn’t tallied by utilities, or isn’t broken out in reports. the effect, if any, is typically lumped under “economic conditions.”

Missouri Gas Energy, for example, hasn’t singled out foreclosures but suspected they were becoming a factor last fall when the utility had fewer reconnections of gas service for homes that had been previously disconnected.

The Board of Public Utilities in Kansas City, Kan., said it hadn’t noticed any additional impact from foreclosures lately but added that some parts of its service territory were economically depressed before the recession.

Across the country, however, there is general acknowledgement that foreclosures are playing a role.

“unfortunately, there have been many home foreclosures in Nevada, and residential electric sales have remained relatively flat for the past couple of years,” said Karl Walquist, a spokesman for NV Energy. it serves Las Vegas, one of the cities hit hardest by foreclosures.

Utilities have generally had a rocky time this year as the economy tries to gain traction. For example, KCP&L for the first half of 2011 earned $45 million, down from $84 million for the first half of 2010.

The decline would have been worse if not for higher rates the utility’s customers now pay in large part for an energy plan that included a coal-fired power plant near Weston.

The residential piece of the consumption puzzle became clearer when KCP&L calculated first-half electricity use adjusted for normal weather. Utilities say that’s a good gauge of the strength of each category of their business, because it strips out the volatility of weather and its effects on heating and air conditioning.

The results were shared last month with a group of utility analysts, including the 4 percent drop in residential consumption. Commercial demand was down 0.9 percent, and industrial consumption was down 1.2 percent.

The analysts were told the decline came from people switching to natural gas heat, the use of more-efficient heat pumps and air conditioners, some other energy conservation and “continued challenges in the local economy,” which included the foreclosures.

Because KCP&L’s electricity prices are relatively low when compared with the national average even with the rate hikes, thermostat-tweaking hasn’t been a big factor, even in tough times. a quarterly survey of KCP&L’s customers found only about 10 percent doing something to reduce electricity consumption.

Those surveyed said they were more likely to cut back on driving and entertainment to save money.

KCP&L says electricity sales eventually will rebound — but when depends on the economy and the recovery of the housing market.

“That’s the new normal,” said Caisley of KCP&L. “the economy is the biggest driver.”