Evergy has plan to save $145 million a year. Don’t expect smaller utility bills yet
If Evergy’s $9 billion plan to modernize its grid and infrastructure, streamline operations and transition to renewable energy is approved, the utility predicts it will save about $145 million a year over the next four years. But Kansas residents could see a rate increase of 1.6-2% per year during that time.
Evergy says it plans to reinvest its savings back into its system to pay for most of its Sustainability Transformation Plan.
“I think the spending piece of the Sustainability Transformation Plan gets a lot of attention, but I think we need to keep in mind that the spending and the savings are related,” said Andrew French, Kansas Corporation Commissioner. “We shouldn’t take our eye off the saving ball, as well, because those dollars that we save flow through directly to customers on a dollar for dollar basis and an ongoing basis, as well.”
During a Dec. 21 hearing, Evergy discussed how it would be more efficient in its operations to save money by continuing to consolidate and modernize its operations.
For example, Evergy spends $60 million a year trimming trees. Under the new plan, the utility will gather more data so it can have better schedules and get a better price for tree trimming.
This was the second of three workshops the Kansas Corporation Commission scheduled to ask Evergy executives questions about the plan. For the first time, workshops of these types were open to the public at the behest of several advocacy organizations to aid transparency.
“The savings that we’ve been talking about today are critical to the implementation of the Sustainability Transformation Plan, in that achieving those savings is what enables Evergy to hold the rate increases to that 1.6-2% compound annual growth rate,” said Jeff McClanahan, KCC utility division director.
Utility rates will be impacted differently based on areas of the state, but how they will differ, along with other specifics on how much the company will save and how they will save it, will not be released to the public, according to Evergy.
“We believe if some of this can be released out into the public, we absolutely want it to be released and be transparent,” said Susan Duffy, KCC Commission chair. “That is our responsibility...to continue to review to ascertain whether this really is confidential information.”
Evergy’s savings predictions could change with federal legislation or executive action, such as carbon pricing, where the federal government could put a price on carbon emissions as a way to mitigate climate change.
Part of streamlining operations will be a reduction in staff. While Evergy won’t lose any field staff, most of the staff reduction will be in support staff, such as IT, part of which will be outsourced abroad, according to Greenwood. Outsourcing IT support has become a common business practice to keep projects going 24/7.
Another way Evergy plans to save money is to optimize when it take its gas and coal units offline to do maintenance.
“The best practice when I started in this industry was every 12 months, then it became every 18 months,” Greenwood said. “Now, as...we have more sensors and intelligence on those units, best in class is more like every three years. If we only have a maintenance outage every three years, there are more days during that three-year period that that unit is available to the market and if it’s called upon because it’s a lower cost resource to meet regional demand, customers save money.”
The next workshop on Evergy’s Sustainability Transformation Plan will begin at 10 a.m. Jan. 20 and will be live-streamed on the KCC’s youtube channel.
This story was originally published December 22, 2020 at 2:11 PM.
