Ballooning Evergy spending plans raise questions, prove need for public hearings in Kansas

Kansas Reflector welcomes opinion pieces from writers who share our goal of widening the conversation about how public policies affect the day-to-day lives of people throughout our state. Glenda DuBoise is the state director for AARP Kansas. She has previously worked in both large and small companies and nonprofit organizations across Kansas and beyond, most recently as the executive director of the Topeka Center for Peace and Justice.

On behalf of our more than 278,000 members here in Kansas, AARP continues to express concern about Evergy’s excessive 2022 five-year capital investment plan filed with the Kansas Corporation Commission.

The plan revealed an increase in capital spending of approximately $1.2 billion, or nearly 22% more than the financial model it used in its 2020 sustainability transformation plan over the next two years. In Evergy’s sustainability plan, the utility projected a 51% increase in the value of the total equipment and assets in service for Great Plains Energy and Westar at the time the KCC approved their merger.

Evergy boasts on billboards and elsewhere that its rates have now decreased, but it has not admitted in its advertising that it plans a huge rate increase immediately after the five-year rate freeze that began Dec. 18, 2018, ends. In fact, the utilities convinced the KCC that the merger would increase operating efficiencies, and thus lower rates for customers.

Yet Evergy’s capital investment plan continues to escalate year by year. The 2022 five-year plan increased over the 2021 five-year plan by more than $1 billion (18.27%), which in turn increased over the 2020 five-year plan by nearly another $1.1 billion.

It is time for Evergy to explain why it needs massive capital spending increases to adequately and sufficiently serve its customers. Ratepayers should have an opportunity to respond and tell the KCC how rate increases arising from Evergy’s huge capital spending will adversely affect them.

Thus, it is not surprising that the KCC has required Evergy to hold a workshop explaining the latest increase. That workshop is scheduled for 9:30 a.m. Dec. 13. While the public is invited to view the workshop online on the KCC’s YouTube channel, there is no opportunity for public input.

AARP Kansas is disappointed that the KCC did not hold its own hearings on the proposal with an eye on informing Kansans and keeping Kansas’ electric rates fair and affordable, especially given the current inflationary environment. These increases will just build on top of the already devastating impact of rising costs for Kansas residents who are age 50 and older and their families, many of whom struggle to pay their utility bills along with other household expenses like food and medicine. We will continue to focus on ensuring Evergy and other utility companies receive only what is reasonable.

AARP agrees with KCC staff recommendations that Evergy should slow its spending on expensive new high-voltage transmission lines and use lower-cost purchased power arrangements. We also believe that Evergy should be required to file an updated, detailed spending plan that is presented in hearings, not workshops.

In a detailed analysis of Evergy’s sustainability transformation plan as referenced above, AARP’s experts found that the plan could increase electric rates by 9% and that some of the spending was not needed to maintain or increase reliability, nor did the plan consider how affordable it is to their customers. This was before the most recent $1 billion increase in the capital investment plan.

Our white paper noted:

AARP believes Evergy’s STP uses legitimate public interests — including electric system reliability, storm resilience and environmental impact — as excuses to invest more money in its electric system than is necessary, resulting in higher electric rates.

AARP suspects that Evergy is doing this because utility profits and stock prices generally increase with investment levels.

Concerns with the utility’s sustainability plan include the following.

• Rate increases may exceed the 9.3% by 2025 that Evergy projects.
• Rate increases will coincide with other price drivers, resulting in exceptionally large electric rate increases in the future.
• Standard operating practices and existing investment levels are adequate to maintain Evergy’s current reliability.
• Advocate input into plan development was inadequate; therefore, the sustainability plan does not accurately reflect customer or state priorities, including energy affordability.
• The plan’s proposed approach to growing renewable generation is not least cost.
• The plan includes no accountability for performance improvements.

In summary, the KCC should more formally investigate the details of the spending plan with a focus on reducing Evergy’s already too-high residential electricity rates. AARP Kansas urges the KCC to tell Evergy to limit its spending to what is absolutely essential.

Through its opinion section, the Kansas Reflector works to amplify the voices of people who are affected by public policies or excluded from public debate. Find information, including how to submit your own commentary, here.