UPDATE: The Kansas Chamber was granted intervention by the Kansas Corporation Commission in July. The story and headline — originally published in May — have been adjusted to reflect that development.
Kansas businesses advocacy organizations —such as the Kansas Chamber and Wichita Regional Chamber — in July were granted intervention by the Kansas Corporation Commission (KCC) in a utility rate case they believe is concerning to electricity customers.
In April, Evergy filed a request with the KCC to increase the public utility’s rates by 9.75 percent. If approved, this would raise Evergy’s revenues by $218 million.
At the request of its rate-paying members, the Kansas Chamber joined many Kansas business advocates in filing a petition to intervene in Evergy’s case with the KCC. Now that interventions have been granted, organizations will be able to oppose the case when it’s evaluated by the KCC in August 2023.
“We were asked by members to file an intervening case that simply allows us to potentially have a seat at the table,” said Kansas Chamber President & CEO Alan Cobb. “That doesn’t guarantee any further filings, but it gives us the option. Reliable and affordable electric rates are vitally important to our members and to Kansas economic competitiveness.”
Evergy’s Senior Manager of Corporate Communications Gina Penzig told KansasBizNew.com that setting base rates at this time was part of the original merger agreement approved by federal and state utility regulators when Westar Energy and the Kansas City Power and Light Company merged to form Evergy in 2018. The utility had agreed not to increase rates for a five-year period following the merger.
“During those five years we’ve continued to invest in the power grid and continue to invest in customer systems,” Penzig explained. “We need to update rates to reflect those investments. During that time, we also have gained some merger efficiencies that are being used to offset some of the costs that we’ve incurred over those past five years.”
Penzig shared that working with stakeholders to evaluate cost recovery for Evergy has always been an important process for the company and it anticipates rich discussions comparing pertinent data presented from all parties involved.
Businesses have raised concerns about the cost of doing business in Kansas as well as electric rates being a deterrent for those considering a move to Kansas from out of state. Lawrence Paper Company also filed a petition intervene in Evergy’s case with the KCC.
“We already hear about people not wanting to locate in Kansas,” said Lawrence Paper Company President Justin Hill. “The price of electricity is way too high. It’s like we’re trying to kill any way to make it right. We have the lowest wholesale price of electricity anywhere. But the problem is the Southwest Power Pool is not allowing Kansans to be paid for having to maintain the coal and gas plants. We’re unfairly feeling the brunt of it. The cheap wind energy is going elsewhere and so our rates are the highest in the region.”
In 2022, the average retail price per kilowatt-hour for commercial customers was 11.41 cents in Kansas, while neighboring states had much lower prices at 8.99 Cents/KwH in Nebraska and 9.15 Cents/KwH in Missouri.
According to Penzig, Evergy’s intention is to recover costs the utility has incurred and maintain a competitive return for its investors.
“We’ve been able to hold our rates nearly flat for the past five years while regional rates have increased,” Penzig said. “As an investor-owned utility, our investors compare their ability to earn a return with Evergy versus other utilities. It’s important that we are providing a competitive return for those investors. Otherwise, they’ll take their investments elsewhere, and it can affect our ability to finance operations.”
On behalf of its rate-paying members, the Kansas Chamber expressed misgivings about Evergy’s transmission investments during the utility’s agreed-upon five-year rate hold.
“While it’s true that Evergy kept its rates flat, it’s important to bear in mind it wasn’t out of charity,” said Kansas Chamber Vice President of Government Affairs Eric Stafford. “The merger REQUIRED Evergy to hold rates flat for five years. But they’ve loaded up on capital investments and that’s been a major driver in the problem of high retail rates.”
The requested rate increase was followed by Evergy’s corporate executives highlighting record revenues on an investor call in early May.
Associated Purchasing Service Corp. (APS) — a healthcare solutions organization owned by the Kansas Hospital Association and the Missouri Hospital Association — also filed a petition to intervene in Evergy’s case with the KCC.
“This is the first of many rate cases,” said APS CEO Dennis George. “APS is intervening to ensure hospitals have reliable electric delivery and competitive rates. Evergy is moving to carbon free and APS supports renewable energy. We will be working on any possible issues to protect our members so they can have reliable service and competitive rates. Kansas currently has the highest electric rates.”
A hearing has been set for Topeka area residents to make public comments in July and learn more about the proposed rate increase of more than $14 on their monthly bills.
