Kansas electric rates are not regionally competitive — the KCC should address this problem

February 4, 2021 3:33 am

It’s time for the Kansas Corporation Commission to work with Evergy and help Kansas move toward regionally competitive electric rates. (Getty Images)

The Kansas Reflector welcomes opinion pieces from writers who share our goal of widening the conversation about how public policies affect the day-to-day lives of people throughout our state. Jim Zakoura is president of the Kansas Industrial Consumers Group and Kansans For Lower Electric Rates.

I’m a lifelong Kansan, growing up in the wonderful city of Osawatomie, in Miami County. I have strong pride in our great state and want to do what I can to help it flourish. A major challenge impacting Kansas’ growth is high electric rates.

Recently, the U.S. Energy Information Administration issued its 2019 Electric Rate Comparison for all electric suppliers throughout the United States. Evergy’s electric rates in Kansas compared to other regional suppliers should be a cause for alarm for legislators and Gov. Laura Kelly’s administration.

As the EIA Report confirms, Evergy’s Kansas electric rates are not competitive with other electric suppliers throughout the Midwest. This affects about one million of Evergy’s retail electric customers in Kansas.

Evergy’s electric rates for Wichita, Topeka, Lawrence, Salina, Manhattan, Pittsburg and dozens of communities in Kansas are materially higher than four states that border Kansas. Evergy’s rates are:

  • 29% higher than electric rates in Oklahoma City
  • 26% higher than electric rates in Tulsa
  • 16.48% higher than electric rates in Lincoln, Nebraska
  • 11.92% higher than electric rates in St. Louis
  • 11.82% higher than electric rates in Omaha
  • 7.16% higher than electric rates in Denver

The rate disparity is even greater for Evergy customers in the Kansas City Metro (formerly KCP&L).

The Kansas Industrial Consumers Group, Inc. has worked for several years at both the Kansas Legislature and the Kansas Corporation Commission to bring to light this regional electric rate disparity. The Kansas Industrial Consumers Group and Kansans for Lower Electric Rates believe that these high Evergy electric rates make it harder for Kansas businesses to compete in the region and are a hardship for Kansas residents and businesses that are struggling in these difficult economic times.

In 2018, the Senate passed Senate Concurrent Resolution 1612, which had 30 sponsoring senators, including then-Sen. Laura Kelly. This resolution was passed and expressed the will of the Senate: that Kansas have regionally competitive electric rates.

Kansas Industrial Consumers Group and Kansans for Lower Electric Rates worked to make this Senate resolution into Kansas law in the 2019 Legislative Session. On April 18, 2019, K.S.A. 66-1287 was made effective. The statute provided for a study: “to provide information that may assist future legislative and regulatory efforts to craft forward-looking electric policy that leads to regionally competitive electric rates and reliable electric service.”

There are now multiple studies that attest to the fact that Evergy’s Kansas electric rates are not regionally competitive.

Every year the US Chamber of Commerce creates a map of electricity prices. Every year Kansas is the highest in the region. (Kansans for Lower Electric Rates)

To date, however, the KCC has not addressed the issue or even asked Evergy for a plan to lower these rates. The KCC is, however, hosting workshops related to Evergy’s $9 billion capital expenditure program for 2020 through 2024.

Capital expenditures in this case are primarily focused on transmission and distribution spending, with a small amount of solar. It’s important to note that utility shareholders make more money by investing more capital. Evergy has outlined for its shareholders how increased spending leads to increased shareholder returns.

We are very concerned that possible rate increases associated with such a massive capital expenditure program will drive retail electric rates to yet higher levels, making Kansas even less competitive and adding to the financial burden of Kansas residents.

In what is hopefully a new accessibility standard, the general public can follow along with most of the proceedings on the KCC’s YouTube channel.  The public can always make their voice heard by contacting the KCC and their legislators.

Utility regulation can be complex, and at the end of the day, everyone wants their lights to come on. That’s clearly job one. But many, many Kansans also care about the cost, whether on principle or because it’s a reality of their pocketbook.  The simple answer is we can have low-cost, or simply average cost, electricity that is also highly reliable. Just look at any of the cities listed above — they figured it out.

The eyes of Kansas ratepayers have been opened to see that we already pay the highest rates in the region. The Legislature and the governor have highlighted the issue. Now it’s up to the KCC to work with Evergy and help Kansas move toward regionally competitive electric rates.

Through its opinion section, the Kansas Reflector works to amplify the voices of people who are affected by public policies or excluded from public debate. Find information, including how to submit your own commentary, here.

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Jim Zakoura
Jim Zakoura

Jim Zakoura is president of Kansas Industrial Consumers Group and Kansans for Lower Electric Rates.