March 4, 2024

Keeping Media and Government Accountable.

KCC grants public utility status to wind developer that could raise electric rates

Share Now:
Print Friendly, PDF & Email

The Kansas Corporation Commission (KCC) has approved the first stage of a project which will see electricity from the Wolf Creek nuclear power plant near Burlington sent out of state rather than powering Wichita and Kansas City.  NextEra, the developer, believes rates could be lower for some Kansans, but opponents say rates could rise as much as 21% in Western Kansas.

At a special meeting on Aug. 29, 2022, the KCC unanimously granted a “certificate of convenience and necessity” to NextEra Energy Transmission Southwest — which enables NextEra to do business as a public utility in the state.

With that comes the power of eminent domain.

This is the first step toward a transmission project — largely to be paid for by Kansas consumers —  half a football field wide cut through five counties and 89 miles of Kansas countryside. If landowners along the proposed path decline to sell, NextEra will be able to condemn the land and force a sale.

The Southwest Power Pool, the regional federal electricity transmission organization that covers Kansas and other states, earlier this year asked the Kansas Corporation Commission to declare NextEra, the wind developer selected for the project by the SPP, a “public utility.” 

The project will likely cross farms and ranches in Coffee, Anderson, Allen, Bourbon, and Crawford counties before stretching into Missouri, connecting the Wolf Creek nuclear power plant to a substation in Jasper County, Missouri.

If approved, the line would send electricity that was originally intended to serve the Wichita and Kansas City metro areas to customers in Missouri, but Kansas customers will have to pay for the transmission line via higher electricity rates.

All while already paying some of the highest electric rates in the country.

“Based on the testimony received, the Commission finds that the Transmission Project will have a beneficial effect on customers by lowering overall energy costs, removing inefficiency, relieving transmission congestion, and improving the reliability of the transmission system,” a release from the KCC stated.  

The KCC added only one caveat, which is that NextEra must “evaluate” the feasibility of double circuiting the line with an existing 25-mile Evergy 161 kV transmission line and report back before a line siting application can be filed with the Commission.

“To reiterate, failure to earnestly and completely review the double circuit option may result in a proposed route that the Commission cannot approve as reasonable, which the Commission wishes to avoid,” the release states.

Benefits to consumers are questionable

The KCC and SPP say the project is necessary to reduce “congestion” on the grid from renewable energy flowing eastward from the large wind farms in Western Kansas and that the project will reduce overall costs.

However, a legal document filed by Kansas Industrial Consumers Group attorney Jim Zakoura notes that, while the project might show an overall reduction in average energy prices across the state, it could cause an increase of as much as 21%  in western Kansas.

Moreover, KCC’s finding requires that it shows the project will benefit Kansas ratepayers, and even the SPP could find no evidence that it would.

A 2019 Integrated Transmission Planning study — which looked at transmission projects and capability region-wide — included no Kansas-specific benefits, and in fact, KCC engineer Kelsey Allen stated in testimony that it was not possible to identify Kansas-specific benefits and “any attempt to do so would be questionable as to its accuracy.”

However, the KCC has categorically stated the project would be beneficial to Kansas, claiming in their release consumers would only see an increase of four to five cents per month to cover the cost of the line beginning in 2025 but would then see a reduction of $4 to $7 per month over the forty-year life of the project.

In testimony, KCC Chief of Revenue Requirements Justin Grady said there was “no evidence” the project would be “shipping nuclear or wind power” out of state.

But, given that the line is connecting Wolf Creek to substations in Missouri, this seems disingenuous — at best.

Moreover, according to testimony from Jeff D. Makholm, managing director at National Economic Research Associates, the problem is that KCC staff relied entirely on SPP’s own analysis rather than conducting their own.

“Staff has relied on SPP’s benefit modeling, and resulting SPP ‘Benefit Metrics,’ to support its conclusion (having done no independent analysis regarding whether Blackberry meets the ‘necessity’ or ‘just and reasonable’ tests under Kansas statutes),” Makholm said. “For its part, in presenting those ‘Benefit Metrics’ driving Staff’s recommendation, SPP used methods to evaluate new transmission projects within the SPP region that (as SPP itself states) have not changed since 2012.”

Additionally, the costs of transmission and additional generating capacity that have been — by law — passed on to consumers have had a stifling effect on economic development.

KIC to appeal

Zakoura said he was “disappointed” in the decision and intends to file an appeal.

“Retail electric ratepayers in Kansas continue to experience large annual increases in electric transmission expenses,” Zakoura said. “For most Kansas retail electric customers, electric transmission expenses now account for 15.5% of the electric bills for residential customers and 20% or more of the electric bills for businesses, schools, the faith community, and the medical community.

“We believe the Legislature, Governor’s Office, the KCC, and stakeholders need to jointly determine a transmission policy for Kansas that allows for the responsible development of renewable energy without placing unnecessary costs on overburdened ratepayers.”

Share Now:
Print Friendly, PDF & Email

Related Articles