If the Kansas Corporation Commission approves several rate increases Evergy is requesting, Evergy Kansas Central customers will find their electric bills have increased by over 33% since 2022.
Evergy Central was awarded a “System Average Retail Rate Increase” of 7.7% starting in 2023..
Now, the company is requesting a 2.42% system-wide “Transmission Delivery Charge” increase from the KCC; a system-wide increase of 13.6%; and an additional 9.3% to cover the cost of building two new gas-fired power plants and a solar facility.
The total? A 33.2% rate increase since 2022. The full weight of the plant construction increase would not hit until around 2029, but would start hitting bills a year after construction begins.
According to James Zakoura, an attorney who represents both industrial and retail ratepayers before the Kansas Corporation Commission, the system-wide increase is being requested to generate higher returns for shareholders.
“One of the big movers on that, is they’re asking for an increase in the rate of return for their shareholders,” Zakoura said, adding that Evergy wants their shareholders to see a 10% to 10.5% rate of return.
Indeed, the Topeka Capital Journal is reporting that Evergy is seeking an additional $196 million in revenue despite posting $878 million in adjusted earnings in 2024.
According to the Cap Journal, at the recent annual meeting, Evergy CEO David Campbell reported that the electric monopoly that covers most of eastern Kansas increased dividends by 4%.
“With respect to financial results in 2024, I’m happy to report that we had a solid year,” said Campbell. “Growth in 2024 was driven primarily by higher residential demand and recovery of regulated investments. Strong execution on cost management, which is a hallmark of our team’s capabilities, helped offset the impacts of wild weather. In November, we raised our dividend 4%.”
Campbell also said “shareholders care predominantly about earnings and earnings growth,” and Evergy would “like to get competitive” on earnings growth, the Cap Journal reported.
New power plants are likely unneeded
However, as the Sentinel previously reported, it is unclear if the new plants are needed for anything but for Evergy to “get competitive” on earnings growth.
The Kelly administration and Evergy are claiming new demand is driving the need for the plants that will be funded by Kansas rate-payers.
According to Zakoura, that demand simply hasn’t been demonstrated.
“They contend there is new demand that has not been demonstrated at this point, nor has it been provided in any detail,” Zakoura said. “The most that is said is that they want new plants to meet demand for, I think, data centers and artificial intelligence, and that carries a whole separate question because those facilities use lots of power, probably more power than used for Panasonic, and they have very few employees, certainly under 50 employees, compared to someone like Panasonic’s 4,000 employees, or someone like Spirit Aerosystems 10,000 employees.
“So you have a large investment to provide electric power for an entity who doesn’t have a contractual commitment to Kansas, and … there’s no statement, at least to date, that they would pay their fair share. And, of course, we would not be supportive of basically 900,000 retail ratepayers building new plants for data centers, which have so few employees, but use so much electric power, because every single cent of the construction will be paid for by retail ratepayers.”
Moreover, according to Zakoura, it is likely that Evergy wants to retire existing coal-fired facilities that still have a useful life.
“(A), there has to be determination as additional power is needed. (B), if that additional power is needed, is this the lowest cost? (C), is the decision made based on the retirement of existing facilities,” he said. “If that’s so, be straightforward and honest with the Commission, telling them that’s what you did, that you’re putting in two new gas plants and you’re going to retire whatever coal plants over a period of time. And then take a real honest look and thorough look as to whether and in what manner the resources that exist in the state are being used to the benefit of the retail ratepayers.”
