A group of large power users is asking state regulators to dismiss Evergy’s request to raise electric rates in the Kansas City area after the utility revealed its intentions not to seek the recovery of lost revenues during the pandemic.
The Kansas Industrial Consumers group asked the Kansas Corporation Commission to either dismiss the request for a rate increase in Kansas City or limit the utility’s ability to recover expenses related to the case.
The group includes companies such as Cargill, Spirit AeroSystems and Goodyear Tire.
Evergy is seeking its first electric rate increase in five years, asking state regulators to approve a $218 million rate hike that would cost residential customers a monthly average of $14.24 in central Kansas and $3.47 in the Kansas City area.
The industrial group’s request, filed with the KCC on Wednesday, is focused only on Evergy’s request for a $14 million rate increase for its 273,000 customers in Lenexa, Overland Park and other communities near the Kansas City metro area.
The proposed rate increase would cost residential customers a monthly average of $3.47 in the Kansas City area. The utility is seeking a separate rate increase for central Kansas, which is more than what’s proposed for Kansas City.
In its filing with the KCC, the industrial consumers group said that Evergy’s lawyers alerted the parties in the case that the utility would not seek recovery of lost revenue during the pandemic.
The group said that Evergy’s claim for COVID-19 losses totals about $7.8 million for the Kansas City area, or approximately 55% of the originally requested rate increase.
Evergy’s remaining requested rate increase, the group said, stems from increasing its return on equity to 10.25% from 9.3%.
The group also said the balance of the rate increase requested for Kansas City is for a depreciation expense of $1.9 million.
The group said that absent an award of the requested return on equity, Evergy is likely to face a rate decrease.
But it added that a rate decrease could be offset by rate case expenses that are greater than the decrease if the KCC doesn’t limit rate case expenses.
“Given the size of the case and its central request to increase shareholder returns, it just doesn’t make any sense for customers,” said Jim Zakoura, who leads the group and represents it before the KCC.
“Customers shouldn’t have to pay expenses for Evergy lawyers and consultants to build a rate case over this single issue,” he said.
Evergy declined comment through a spokesperson.
“The issues KIC raises in its filing are reviewed and ultimately decided as part of the rate case process,” Gina Penzig said.
“Given that we have an ongoing case in front of the Commission, we don’t have a comment at this time,” she said.
The industrial group has had a presence in the Capitol for several years, trying to get the legislation passed that would lower electric rates.
Kansas electric rates have generated interest in the Legislature because they are among some of the highest in the region, although they have declined in recent years.
The proposed rate increase filed with the Kansas Corporation Commission is the first one since 2018, when Kansas City Power & Light merged with Westar.
The company said operational cost savings and merger efficiencies allowed Evergy to maintain flat rates for its customers during the last five years.
Since 2017, the utility said that overall rates for Kansas customers have increased just 0.1% and residential rates have decreased 2.5%, the company said.
During the same time period, the company said that other electric utility rates in states surrounding Kansas have increased nearly 13% while the Consumer Price Index has increased 20%, the company said in announcing the proposed rate increase.
In addition, since the merger, Evergy has delivered $232 million in merger savings and bill credits to Kansas customers, the company said.
