Too much: Kansas utility regulator says Evergy’s rate proposal isn’t justified

State regulators say Evergy’s proposed rate increase for 736,000 Kansas utilities customers is too high.

The energy giant wants to raise rates in the Wichita area and across much of central and eastern Kansas to increase its net revenue by 9.77 percent or $204,152,629. That would result in an average $14.42 a month increase to utility bills.

But Kansas Corporation Commission utilities staff say that isn’t justified.

Instead, the staff’s “detailed financial audit of the company’s income and expenses determined that an increase of 1.66% or $34,706,527 was all that could be justified at this time to provide service to Evergy Central customers,” a Tuesday KCC release states.

Utilities staff also determined that the company can’t justify higher rates for 273,000 customers in Lenexa, Overland Park and other communities near the Kansas City Metro area. Evergy proposed a net revenue increase of 1.95% for those customers but regulators said the company should actually lower its rates for those customers.

“KCC Staff’s detailed financial audit of Evergy Kansas Metro’s income and expenses determined that a 7.32% rate decrease totaling $53,194,189 is appropriate,” the release states.

In an email response to The Eagle, Evergy spokesperson Kaley Bohlen said the company is not ready to support regulators’ determinations.

“While we do not agree with aspects of the testimony, we stand by the investments in reliability and customer service we have made and we are pleased by the merger-enabled efficiency gains that we are able to share with customers,” Bohlen wrote.

“Our rates have been essentially flat over the past five years and even with the proposed increase will remain well under inflation during that time period.”

Evergy, formerly Westar Energy and KCP&L, has four service areas across Kansas and Missouri. The company has said additional funds are needed to offset rising interest rates and investments in its power plants over the last five years, as well as the cost of dismantling retiring plants, IT expenses and several expiring contracts, including one for “life insurance policies on key company executives.”

The three-member panel of KCC regulators is expected to make its final decision on proposed rate changes in late December or early January.

Wichita Mayor Brandon Whipple said he’s encouraged by the utility staff’s testimony.

“I’m happy to see that the KCC has confirmed the concerns Wichitans expressed during their public meeting,” Whipple said. “This further justifies the resolution passed by the Wichita City Council informing Evergy that this is the wrong time to hike up energy costs on [residents] and businesses.”

The company will have another chance to justify its proposed rate increases before regulators make their final decision.

“The next steps in the process include cross answering testimony, rebuttal testimony from Evergy, a settlement conference to determine if the parties can agree on a resolution to submit for Commission approval, followed by either a settlement hearing or evidentiary hearing before the Commission,” the release states.

This story was originally published August 30, 2023 at 1:19 PM.