Many Kansas residents in the Kansas City metro will pay less for electricity, while most areas of eastern Kansas outside of KC will pay more, under new rates approved by state regulators.
The Kansas Corporation Commission, which regulates utilities, on Tuesday approved a settlement agreement with publicly-owned Evergy that will reduce monthly bills by about $6.07 for the average residential customer in the Evergy Kansas Metro region, which covers much of the metro southwest toward Ottawa.
Residential customers in the Evergy Kansas Central region will pay on average $4.64 more per month. The area spans most of eastern and south-central Kansas, including Wichita, Topeka and Manhattan.
The settlement agreement, approved unanimously by the three-member Kansas Corporation Commission, ends what initially began as a push by Evergy to raise rates in both regions for the first time in five years. The company applied this spring for a rate hike of 1.95% in the Metro region and 9.77% in the Central region.
The original proposal would have led to the average residential customer paying as much as $14.24 more per month in the Central region and $3.47 per month in the Metro region.
Instead, the final settlement allows Evergy to collect 3.54% more revenue – an additional $74 million – in the Central region, while cutting revenue in the Metro region by 4.53%, or $32.9 million. The end result is a net gain for the company of about $41 million in revenue across the whole state.
“I do believe looking at this and the end result, customers are getting very good value for the product given how much we rely on that service and how much of it is needed,” KCC chair Andrew French said during the commission’s virtual meeting. “But that’s not to say that there’s not work to be done.”
French said a lot of future pressures are coming, noting aging infrastructure and a demand for new energy sources.
“It’s going to be very important that we continue to make energy affordable. We’ve got a lot of work to do to make sure that we keep energy reliable,” said French, who was appointed to the KCC by Democratic Gov. Laura Kelly.
“And after we keep those primary goals in mind, I think we need to continue responsibly and stably transitioning to cleaner and more environmentally-responsible electric generation sources.”
An Evergy spokeswoman said the company will comment, but was waiting on the KCC’s formal order in the case. Immediately after the vote, the company was trading at $49.69 a share after closing at $49.83 on Monday.
Evergy’s initial rate proposal drew public opposition, including from some businesses and school districts. It also encountered pushback from the staff of the Kansas Corporation Commission, who, after auditing the company’s income and expenses, said only a far smaller increase could be justified.
In late September, Evergy filed a proposed settlement agreement that didn’t go as far as KCC staff recommended, but nevertheless was a far cry from the company’s initial proposal. The settlement, which the KCC described as unanimous, had the support of the Citizens Utility Ratepayer Board, which advocates on behalf of ratepayers, and other parties in the case.
Andrea Crane, a consultant for CURB, testified in October the agreement “will result in just and reasonable rates.” The Shawnee Mission, Olathe and De Soto school districts, along with Johnson County Community College, also filed a statement in support of the agreement.
Evergy’s ability to reach a unanimous agreement likely made it easier for the KCC to sign off on the new rates. Approval of the agreement was the first major vote by new commissioner Annie Kuether, a former Democratic state representative who joined the commission in October after she was appointed by Kelly. Kuether didn’t comment during Tuesday’s vote except to thank those involved for their hard work.
Evergy is expected to seek another rate increase within a year. The agreement authorizes the company to file an abbreviated rate case related to upgrades necessary to serve the sprawling Panasonic battery plant under construction in De Soto and expenses related to the future decommissioning of the Wolf Creek nuclear power plant southeast of Emporia.
At full production, the Panasonic plant will have roughly 200 to 250 megawatts of demand, Ryan Mulvany, Evergy’s vice president of distribution, has testified. The load is equivalent to that of a small city.