Evergy files first rate review in five years for power grid modernization, reliability efforts in Kansas

Published on April 27, 2023 by Chris Galford

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Evergy, Inc. this week filed its first base rate review since 2018, requesting recovery of $218 million in investments made to improve customer service, the resiliency of the grid, and overall modernization.

The company claimed a reduction of nearly $89 million in operating costs and other billing line items when it submitted its request for the 9.77 percent overall rate increase in the Kansas Central service area and nearly $41 million in operating costs and other billing line items in the Kansas Metro service area. It sought a net revenue increase of $204 million for Kansas Central – about $14.24 bill increases per month for the average residential customer – and $14 million total, or about $3.47 per month from the average residential customer, for Kansas Metro.

Kansas Central includes Topeka, Pittsburgh, Wichita, and other communities in the eastern third of the state, while Kansas Metro is focused on areas such as Lenexa and Overland Park, Kansas.

“We formed Evergy with a focus of reducing costs and making rates more affordable and competitive. Over the past five years, we have made significant progress towards that goal. Since 2018, our Kansas customers have received $232 million in merger savings and bill credits,” said David Campbell, Evergy president and chief executive officer. “We’ve exceeded our targeted merger savings and shared them with customers. Now, we are seeking to recover investments made to improve the electric grid and build a smarter, more reliable energy future for our Kansas customers.”

Evergy, formed in 2018 by a merger between Westar Energy and Great Plains Energy, noted that ongoing savings have exceeded its projections, reducing the overall Kansas rate increase request by more than 37 percent. Reducing the operating costs of the combined company had been part of a commitment outlined in the merger, along with the delayed base rate hike.

Campbell noted that Evergy managed to maintain flat rates despite historically high inflation thanks to operational cost savings and merger efficiencies, which saved it nearly $1 billion overall. By comparison, electric utility rates in states surrounding Kansas have increased nearly 13 percent, and the Consumer Price Index has swelled as well.

If approved by regulators at the Kansas Corporation Commission (KCC), the new rates would become effective in December 2023. Were regulators to approve the full request, it would include allowances for depreciation of investments, funding for expected dismantlement costs during decommissioning of power plants, replacement of legacy customer service systems with a single platform, expanded payment capabilities and outage management capabilities, as well as other updates.