Earlier this year, Evergy asked Kansas regulators for permission to make a hefty increase to its base electricity rates, which would raise the company’s profits by millions of dollars a year.
But an analysis released Tuesday by the Kansas Corporation Commission’s staff concluded that the company is shooting far too high.
Researchers concluded that Evergy should only raise rates slightly in its Kansas Central region, and should actually lower rates in its Kansas Metro region, which includes parts of Johnson and Wyandotte counties.
How do KCC staff’s findings compare with what Evergy asked for?
In the Kansas Central region, which includes Topeka, Wichita and parts of Johnson County, Evergy had asked for a 9.77% net revenue increase that would have hiked customers’ bills by an average of $14.42 per month, or roughly $173 a year.
Commission staff recommended Tuesday that the company only increase revenues by 1.66%-- much lower than what Evergy asked for.
“Staff’s detailed financial audit of the company’s income and expenses determined that an increase of 1.66% was all that could be justified at this time to provide service to Evergy Central customers,” the commission wrote in a press release.
In the Kansas Metro region, Evergy had asked for a 1.95% net revenue increase that would have raised customers’ bills by an average of $3.47 per month, costing them an extra $41.62 per year.
But commission staff disagreed, saying Tuesday that a net revenue decrease of 7.32% is more appropriate. Such a decrease would save customers in that region over $53 million on their bills combined.
Evergy pushed back against some of the commission staff’s recommendations Tuesday.
“While we do not agree with aspects of the testimony, we stand by the investments in reliability and customer service we have made,” spokesperson Gina Penzig told The Star.
“Our rates have been essentially flat over the past five years and even with the proposed increase will remain well under inflation during that time period.”
Why does Evergy want to increase rates?
According to documents Evergy has filed with state regulators, its proposed Kansas revenue increases would make up for its investments in power plants and rising interest rates over the past five years.
In their rate increase request earlier this year, Evergy said they planned to request an additional rate increase next year to adjust to the power load Panasonic would need at its De Soto battery plant.
Evergy had argued that the demand, which would double that of Evergy’s largest customer, would require two new substations, upgrades to three current substations and work on 31 miles of transmission lines.
But commission staff wrote Tuesday that it would not recommend approval for the abbreviated case. At this stage, commission official Andria Jackson said, there is too much uncertainty around the Panasonic project and what expenditures are needed to prepare for it.
“Given that the investment is still an estimate and given the magnitude of the estimated load additions, it is not evident to Staff that the addition of Panasonic is actually going to necessitate an increase in rates,” she said.
Will the Kansas Corporation Commission follow staff’s new recommendations?
We don’t know yet what state regulators will decide to do — the rate case is still ongoing, and Evergy will have a chance to respond to staff members’ testimony at evidentiary hearings in October.
It will then take a few more months for commissioners to decide how much of an increase to customers’ electricity rates it will allow Evergy to make.
“While an important part in the process, these results are far from final at this stage,” the commission wrote Tuesday. “KCC Commissioners will issue a final order in the docket in late December or early January.”
The Star’s Jonathan Shorman contributed.
Do you have more questions about utilities in Missouri or Kansas? Ask the Service Journalism team at firstname.lastname@example.org.