Industrial power users and agriculture groups are asking state regulators to reconsider their decision to allow Evergy to recover the cost of building two new natural gas plants from ratepayers.
The Kansas Industrial Consumers Group has joined with the Kansas Agriculture Associations to appeal state regulators’ decision to approve Evergy’s proposal to build two gas plants, one in Reno County and another in Sumner County.
The Kansas Corporation Commission also approved Evergy’s plan to build a new $228.1 million solar facility in Douglas County, which is not part of the petition asking for the commission to reevaluate its decision.
The cost of the gas plants, now totaling $3.2 billion combined, is expected to mean an 8.6% rate increase for the 738,000 customers served in Evergy’s central area, which includes Topeka, Manhattan and Wichita.
The rate increase would not start until 2029 and 2030 when the plants start operating.
Evergy Central in Kansas would own 50% of the gas plants and the other 50% would be owned by Evergy Missouri West.
The Kansas Industrial Consumers Group argues that the KCC made its decision without waiting to learn whether the Missouri Public Service Commission would allow Evergy Missouri West to own a stake in the plants.
The groups also renewed their claim that the gas plants aren’t necessary if the utility continues to operate coal-fired plants that it previously intended to close. They say the gas plants were originally predicated on the premise Evergy would close its coal facilities.
Meanwhile, Evergy along with the staff of the Kansas Corporation Commission filed a joint response, saying that the industrial and agriculture groups failed to state any grounds for changing the order clearing the way for the gas plants.
“Petitioners seek to use the administrative reconsideration process as a vehicle to improperly raise new issues and introduce new evidence that could have been presented before the commission closed the record and entered its final order,” they said.
“Such an approach undermines the integrity of the administrative decision-making process and violates the well-established principle that reconsideration is intended to provide the agency an opportunity to correct legal error prior to judicial review based on the existing record,” the utility and the KCC staff said.
The industrial and agriculture groups said Kansas regulators prematurely made their decision without knowing how Missouri will decide on whether Evergy Missouri West should own a stake in the natural gas plant.
They said in their filing that Missouri Public Service Commission staff does not believe it has enough information to determine that the projects are economically feasible and that the economic advantages of the plants may not be greater than their costs.
They said the KCC’s failure to address the partial Missouri ownership issue “resonates” throughout the order authorizing the plants.
For example, they point out that the KCC said construction of the gas plants cannot begin until a firm gas transportation agreement is executed.
“Until the varying ownership issues between Kansas and Missouri are resolved, the amount of natural gas needed is not known,” they argued.
They said the effect of the gas plants on Kansas ratepayers may differ substantially depending on the ultimate decision made by the Missouri Public Service Commission.
“The commissions’ failure to address the bilateral, bi-state nature of the two gas plants is
an omission that requires the commission to reconsider,” they said.
Evergy and the KCC staff, meanwhile, said the “hypothetical” issues raised by KIC are “newly minted and find no support in the record.”
“These issues were not raised in the underlying proceeding and, therefore, cannot be offered as grounds for reconsideration,” they argue in response.
“The commission does not have the power to resolve issues that fall under the authority of regulators in other states and cannot be asked to reconstruct its decisions to address hypotheticals or uncertain future events in other jurisdictions,” they said.
The Kansas Industrial Consumers Group also accuses Evergy of using a “bait and switch” tactic to justify the gas plants.
They said the utility based the need for the gas plants on its long-range integrated resource plan, which at one point called for closing a coal plant as early as 2023.
However, they said Evergy has not committed to a date for retiring the coal plants, only that it will happen eventually.
“Evergy’s lack of commitment to retirement dates is also concerning and detrimental to retail ratepayers when the consequences result in billion-dollar investments,” they said.
Evergy and the KCC staff said the “bait-and-switch” accusation “finds no support in the record and should be dismissed out of hand.”
They said that allegations of manipulation and deception in the face of a record establishing the gas plants were selected through a “transparent” and “empirically supported” long-range planning process was “unfounded and insulting.”
The company said the decision to build the plants was not based on assumed coal retirements, but rather because they were needed.
The company’s long-range plan in 2021 called for retiring its first coal plant in 2023 with others to be closed in the subsequent 20 years.
The long-range plan for 2024 called for closing the first coal plant in 2028 with others to be put out of service in the following 20 years.
The company said retirement dates move around for a number of reasons, including changes in environmental regulations, fuel costs, capital requirements to keep the plants operating and projected load growth.
Evergy said it operates plants until they are required to be shut down by environmental regulations or it becomes more costly to keep them operating than to replace them with a new and more efficient plant.
“Like many utilities throughout the United States, (Evergy Cental) is facing challenges related to sudden and unprecedented load growth, changes in load profiles, higher peak demands, electrification trends…and reliability requirements, and more frequent and severe grid-impacting weather events.
“Given these unprecedented conditions, there is a manifest need for firm dispatchable generation across the Evergy service territories.”
