Years of battles over Kansas electric rates reached a new crescendo Tuesday as Evergy and a group of large-volume power users clashed over a new bill overhauling how energy would be regulated in the state.
Kansans for Lower Electric Rates on Tuesday pitched an expansive bill that it said was intended to control transmission costs, increase transparency for regulators, broaden customer-generating options and clear a path for development of nuclear energy.
The bill touches many different areas, including the Kansas Corporation Commission, the Citizens Utility Ratepayer Board, local regulation of nuclear plants, siting of transmission lines and limiting what are known as transmission delivery charges levied by the utility.
It’s unlikely the bill will get very far this session, but it could return for debate in the future as lawmakers confront the ongoing angst over electricity rates.
Nevertheless, the bill drew sharp criticism from Evergy, which said that 90% of the legislation targeted the utility, although it was opposed by others as well.
The debate over the bill largely centered on whether Evergy’s electric rates were exorbitant or in line with other states.
The debate – as it has in the past – pitted the lobbyist for Kansans for Lower Electric Rates, Paul Snider, against Chuck Caisley, executive vice president of utility operations for Evergy.
“We are back here because we do believe that there’s a significant challenge with electric rates, specifically with Evergy rates,” Snider told the House utilities committee.
“You’ve seen some presentations by Evergy and others that compare Kansas rates to other states, and it looks OK,” Snider said.
“What we do is compare them directly to their investor-owned utility peers, and that tells a very different story,” he said.
He said Evergy Central’s rates are 29% higher than Oklahoma rates for residential customers and 24% higher than for customers in Iowa.
“These issues are real, and we need to address them, because the status quo is currently not working,” he said.
Caisley turned the tables on Snider, saying his clients already benefit from special contracts that provide discounted rates for large employers that contribute to the state’s economy.
“As industrial consumers, they hire lawyers, they hire experts, and their sole purpose is to reduce rate cases for their customers,” Caisley said.
“And anytime they’re effective, doing that in front of the KCC, then it increases rates on Main Street businesses and on residential consumers,” he told the committee.
Caisley said the group changed its name from the Kansas Industrial Consumers Group to Kansans for Lower Electric Rates in front of the Legislature to “clothe themselves in the auspices of residential and commercial consumers.”
“When you think about the proponents, it is not residential and consumer customers that you see here,” Caisley said.
“It is big business with lawyers and lobbyists who already have special rates, and every time they are successful in the Kansas Corporation Commission, just like in the Legislature, it’s going to hurt residential and commercial customers and benefit them.”
Democratic state Rep. John Carmichael of Wichita questioned Caisley about Evergy’s role in approving special contracts for discounted rates for major employers.
“You get to hand out these perks for which you’re complaining today that you say are driving up our rates,” Carmichael said.
Caisley responded, “They absolutely are driving up their rates. If you are a consumer that is located in the state and your rate was something today and we lower it, then it raises rates on everybody else.
“Yes, we agreed to every single one of them because we want to make sure that manufacturers, and, you know, the oil companies that are in our state are competitive with other states,” he said.
“My point there, Rep. Carmichael, is just that these have the lowest rates on the system, and yet they are back every single year, asking for more…”
“The groups that are here, acting as proponents, have the lowest rates on our system and are actually subsidized,” he said.
After the meeting, Snider said Evergy is the only entity that can propose special contacts and they have to show a benefit to the system. They have to be approved by the KCC.
He said two members of the group he represents have special contracts with Evergy. There are now four special discount contracts, plus a pending contract with Panasonic.
The bill does a variety of things such as:
- Prohibiting any electric public utility that serves more than 5,000 retail customers from participating in a transmission line project directed by the Southwest Power Pool that is 300 kilovolts or more without it being competitively bid.
- Prohibiting any city, county or township from enacting or imposing any land-use restriction or taking any action that prohibits, restricts or limits construction and operation of a nuclear power plant. It would not prohibit any local restrictions or actions for nuclear facilities located 500 feet or more below ground level.
- Establishing a noncompete law that applies to commissioners and employees of the KCC. Former commissioners or employees would be prohibited from accepting employment or receiving compensation from any public utility within 365 days after leaving the agency.
- Requiring lawmakers to approve construction of a high-impact electric transmission line after the KCC has authorized a transmission line siting permit. A “high-impact electric transmission line” would be defined as any line or extension of a line that is at least 1 mile in length and used for the bulk transfer of greater than 345 kilovolts of electricity.
- Requiring members of the Citizens Utility Ratepayer Board be subject to Senate confirmation when next appointed. The bill also would prohibit the membership of the CURB board from including more than three members from the same political party.
- Requiring the KCC to provide notice of certain meetings between commissioners and staff and interested parties regarding legislative or regulatory matters that could impact electric rates. The notice would be required to be posted on the KCC’s website each week with information pertaining to meetings held in the prior week.
Caisley said at least a half-dozen provisions in the bill would rework state utility
law in a way that “will increase electricity rates, reduce reliability and devastate economic development in Kansas.”
Further, he said the bill treads in areas where federal law preempts state legislation.
“This is just plain bad regulatory policy that will decrease rates for a select few large industrial consumers in Kansas while raising rates on residential consumers and Main Street commercial businesses.”
The bill had support from the Kansas Chamber of Commerce and Americans for Prosperity.
It was opposed by the Kansas Corporation Commission, Kansas Municipal Utilities, the engineering firm Burns & McDonnell, the League of Kansas Municipalities and several chambers of commerce from Overland Park, Olathe, Topeka and De Soto.
Speaking on behalf of Americans for Prosperity, Mack Morris asked lawmakers to support the legislation because it would hold down electric costs.
“Ratepayers, families and businesses are seeing higher costs in their electricity, and we believe the (bill) provides comprehensive reforms to reverse the trends and be able to address our energy needs that were yesterday, today and the future,” Morris said.
Eric Stafford, just named as the Kansas chamber’s new president on Tuesday, said there’s room for compromise on the legislation.
“We’ve heard plenty over the last couple weeks that there’s some problems with the bill, and I think you know, from from our perspective, we’re willing to work through those problems and find solutions that are beneficial for ratepayers in the state,” he said.
Reagan McCloud, director of government relations for Kansas Electric Cooperatives, raised several federal constitutional issues about the bill.
He said there were multiple provisions of the bill that were either illegal on their face or were likely to lead to costly litigation that would affect ratepayers.
“The irony here that is not lost on me, is that the proponents of this legislation claim to be advocating for consumer electric rates,” McCloud said.
“That’s not protecting ratepayers, that’s sticking them with the tab.”
