Out of concern for customers, KCC launches an investigation into Evergy’s deal with asset management company Elliot International
TOPEKA – This morning, the Kansas Corporation Commission voted to open a general investigation into an agreement between regulated utility, Evergy, and asset management company Elliot International. The agreement, reached in February, requires the utility to consider cutting costs or pursuing a merger transaction in order to increase shareholder profits.
KCC staff petitioned Commissioners to launch the investigation out of serious concern that the agreement could negatively affect Kansas electric customers.
“Staff is very concerned that Elliott’s focus on increasing shareholder value will place Evergy’s customers at a high risk of paying higher rates or receiving lower quality service in order to support an increase in shareholder value,” the KCC filing said.
By opening an investigation, the Commission, stakeholders and customers will be fully informed of the analysis and rationale of Evergy’s decisions relating to the Elliott agreement.
Staff’s report outlines an extensive number of issues that present a challenge to Elliot’s shareholder enhancement concept. Those include:
- Merger commitments made in 2018 when the Commission approved the merger of Westar and Kansas City Power & Light into one company now known as Evergy.
- KCC Staff and Evergy rate studies that point to extensive capital expense investments and reduced sales as major drivers of the increases in Evergy’s rates.
- Legislative efforts to reduce Evergy’s rates to become more regionally competitive.
- The economic impact of the COVID-19 pandemic.
Evergy will be required to file a report addressing questions posed by KCC staff no later than two weeks after its board makes a decision whether to pursue a cost reduction plan or a merger transaction. The deadline for that vote is August 17.
Today’s order can be viewed at http://estar.kcc.ks.gov/estar/ViewFile.aspx?Id=509dd85d-5964-4d3c-923d-1f2ba1811834