2023 Legislative Issues
KLER’s main priority for the 2023 Legislative Session is KCC Reform. We need regulators who agree with the goal of regionally competitive eclectic rates. SB 88 and HB 2154 advance that goal.
The identical bills propose to make the commissioners of the KCC statewide elected positions. Currently, the governor appoints the commissioners. The other key change is moving most of the utility staff at the KCC to the attorney general. This model is seen in several others states, including Oklahoma.
Here is KLER's testimony on the bills.
Controlling the Transmission Delivery Charge (TDC) -- HB 2225
HB 2225 was proposed by the Kansas Corporation Commission to remove what they term a loophole in the law that allows Evergy to receive an enhanced federal (FERC) return for local transmission projects.
The bill ensures local projects are treated like other local investments and removes Evergy's ability to recover costs through the annual TDC surcharge. The company would need to recover costs through a rate case, like other investments.
Transmission spending by Evergy has been increasing each year. HB 2225 seeks to protect customers by slowing down increases.
Here's KLER's testimony in support.
KLER’s main priority for the 2022 Legislative Session was slowing down and moderating the constant annual increases in electric rates. KLER proposed a bill, SB 349, to limit annual increases to 1%. Expenses over the 1% cap could be recovered at a later date.
The bill received a hearing in the Senate Utilities Committee but was not brought up for a vote due to concerns about possibly significant deferred rate increases in the future. In addition to KLER, the Kansas Chamber, Americans for Prosperity, Kansas Grain & Feed Association, and the Kansas Oil & Gas Association supported the bill. Evergy and the Kansas Corporation Commission opposed the bill. You can find all the testimony here.
KLER also had an opportunity in the House Energy & Utilities Committee to provide an overview about high electric rates. That presentation can be found here.
KLER also partnered with the Kansas Chamber to deliver a letter to all legislators highlighting the transmission delivery charge (TDC) increases and suggesting much more work is to be done. The letter said the Legislature may need to address:
Breaking the current ratemaking scheme of increasing spending equaling increased rates
Election of KCC and other KCC reforms
A copy of the letter is here.
The legislative session started in January and will last until the first part of April. KLER has been active in the capitol this year advocating for reasonable changes to position Kansas for regionally competitive electric rates.
HB 2181 and SB 81 would require the KCC to provide a report on the cost of electricity in other states, compared to Kansas. The goal is for the Legislature to measure whether Kansas is getting more or less competitive. Instead of passing a bill, legislators encouraged the KCC to simply provide reports; the KCC will start in 2022. KLER Testimony.
HB 2180 and SB 80 would moderate increases in the Transmission Delivery Charge on Evergy bills by only allowing Evergy to increase rates when they go through a rate case, instead of annual increases. There was a hearing in the House but it failed to move forward after the KCC opposed the bill. By the way, there will be a large increase in April. KLER Testimony.
Here's a fact sheet on both bills. Evergy and the electric cooperatives opposed both bills (technically they were "neutral" on HB 2181 and SB 81, but it came across as opposed.)
A securitization bill, SB 245 sponsored by Evergy, started to move very rapidly through the Senate Financial Institutions and Insurance Committee, which is a strange place for an energy bill. While securitization, in general, can be very positive for customers, SB 245 lacked important consumer benefits. Senate Leadership agreed to slow the bill down, letting KLER and other stakeholders work with Evergy to improve the bill.
After several weeks of discussions, a new bill, Senate Substitute for HB 2072, emerged with KLER's support. It passed the Senate 33-7 and the House 113-9. It has possibly the strongest consumer protections of any securitization bill in the country. Here's a fact sheet on securitization.
On March 25 KLER presented to the Senate Utilities Committee about the concern with the rate increases associated with Evergy's STP capital spending plan. As reported by the Wichita Eagle, rates are projected to increase 10-11%. That would be about $220M a year, each year, making it the largest increase in state history. KLER is asking the KCC to take action to moderate the increases. Here's the presentation.
HB 2585 (SB 126) passed 39-1 in the Senate and 75-45-1 in the House and was signed by the Governor.
KLER testimony in support
The highlight of the 2019 session was the passage of Senate Bill 69, which mandated a comprehensive study of electric rates. In addition to reviewing causes for high rates, the study addresses potential solutions to reduce rates to regionally competitive levels. The first phase of the study was completed on January 8, 2020 and can be found here. The second phase of the study was completed July 1, 2020.
Testimony on SB 69
2018 was the first year electricity prices became an issue in the Kansas statehouse. The highlight of the 2018 session was Senate passage of SCR 1612, a resolution highlighting Kansas' challenges with electric rates.
We appreciate the senators that voted for the resolution and getting the ball rolling. It was also good to see media coverage of the issue.