Kansas regulators on Thursday turned aside a request asking them to reconsider their decision to allow Evergy to recover the cost of building two new natural gas plants from ratepayers.
The Kansas Corporation Commission quickly, without comment, voted down an appeal of its decision to approve the new gas plants that will lead to rate increases in the future to cover the cost of construction.
The company is planning to build two gas-powered plants – one in Reno County and another in Sumner County – totaling $3.2 billion.
The plant in Sumner County is expected to begin producing electricity in 2029, while the plant in Reno County is expected to start operations in 2030.
The cost of the gas plants 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.
The Kansas Industrial Consumers Group argued 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.
Evergy Central in Kansas would own 50% of the both gas plants and the other 50% would be owned by Evergy Missouri West.
Just last week, Missouri approved the need for the coal plants but stopped short of approving any kind of rate increase to cover the cost of construction.
The KCC said that the Missouri Public Service Commission’s decision was not a fundamental issue requiring resolution in Kansas.
Further, the KCC said the claim is now moot since Missouri has already decided the issue.
The challengers also renewed their claim that the gas plants weren’t necessary if the utility continues to operate coal-fired plants that it previously intended to close.
They said the gas plants were originally predicated on the premise Evergy would close its coal facilities.
However, the KCC said the appeal erroneously assumed that the eventual retirement of Evergy’s coal fleet was the sole basis for approving the gas plants.
The KCC on Thursday said there were multiple grounds for approving the gas plants.
“There is substantial competent evidence to support the finding that the (gas plants) are reasonable, reliable, and efficient,” the KCC said in the order rejecting the appeal.
The KCC noted that approval of the gas plants did not require or precipitate the retirement of any particular coal unit.
The agency noted it found that delaying coal plant retirements does not negate the need for the gas plants.
“The overwhelming weight of the evidence suggests the (gas plants) will be extremely
reliable, compared to other generation resource options,” the KCC ruled Thursday.
In approving the gas plants, the commission concluded the plants will undoubtedly improve the reliability of Evergy’s generation fleet, the KCC ruled.
The appeal was brought by heavy volume industrial users such as Goodyear, Cargill and Spirit AeroSystems as well as the agriculture groups Kansas Grain and Feed, Kansas Agribusiness Retailers and Renew Kansas Biofuels.
Overland Park energy attorney Jim Zakoura led the appeal effort. He said he had hoped for a different result.
“The commission’s order today will increase retail rates by an additional 9.3% as these generation facilities are constructed over the next 4 years,” said Zakoura, alluding to the overall increase that includes a $228 million solar facility in Douglas County.
“More rate increases are likely each year in the foreseeable future, as Evergy increases its spending on electric transmission and generation,” he said.
Officials at Evergy declined to comment, although they had joined with the KCC’s staff to oppose the appeal of the gas plant decision.
