Electric substation

Policies in Topeka determine how much you are charged

How are electric rates set?

Many customers wonder how rates are set.  For customers of Evergy (Westar and KCP&L), the Kansas Corporation Commission (KCC) is responsible for reviewing and approving rates.  Utilities have worn a path to the KCC, asking for, and receiving, increase after increase.  Westar Energy alone increased rates over 30 times the last 10 years, with KCP&L right behind them.  

Investor-owned utilities like Evergy (and Kansas Gas Service and Atmos) make money for their shareholders by earning a return on their "rate base", or their total investment in items like power plants, poles, wires, meters and substations.  When utilities want to "grow shareholder value" they invest in their rate base.  When utilities invest more, customers pay more in rates. 

 

The Kansas Legislature plays an important role in setting utility policy and determining the rules for how the KCC operates.  The Legislature created the KCC in 1933.  

 

The Senate Utilities Committee and the House Energy, Utilities and Telecommunications Committee deal with electric and gas issues.

 

The governor appoints KCC Commissioners to four-year terms.  The Kansas State Senate approves the nominations. 

 

The Citizens' Utility Ratepayer Board (CURB) helps represent residential and small business consumers before the KCC.  The governor also appoints the CURB board of directors.

 

Cooperatives and municipal energy providers have local elected boards that determine rates.

 

The Federal Energy Regulatory Commission (FERC) also has a role to play.  FERC sets the rates for transmission projects.  In general, utilities can earn more money investing in transmission compared to investing in local distribution lines.  And Kansas allows utilities to recover their transmission investments (what they charge you) through an automatic surcharge on their bill.  As a result, utilities have been aggressively investing in new transmission.

Electric rates are going up.  Something needs to change.