The KCC weighs in on Evergy’s Sustainability Transformation Plan emphasizing the need for regionally competitive rates, reliable service
TOPEKA – In an order issued this morning, the Kansas Corporation Commission noted concerns with Evergy’s Sustainability Transformation Plan (STP) and added reporting requirements to evaluate whether the STP is making progress toward regionally competitive rates and reliable electric service.
Today’s order does not attempt to decide the merits of the program or associated investments, those issues will be decided in Evergy’s future rate cases. However, the Commission did outline the following questions and concerns:
- How will the costs associated with the STP impact rates? It is important to achieve and maintain regionally competitive retail rates, and it is unclear at this time whether the STP improves or worsens the trajectory of rates.
- More transparency is needed on Evergy’s projections of future spending increases. The original STP envisioned $8.9 billion in capital expenditure spending from 2020 through 2024. However, in its September 21, 2021 Investor Presentation, Evergy extended its projections through 2025, increasing its proposed 5-year spending to $10.4 billion.
- The Commission remains concerned over Elliott Management’s role in encouraging and developing the STP, noting that as a regulated utility, Evergy should not prioritize shareholder interests to the detriment of ratepayer interests.
Evergy developed the plan after entering into an agreement with Elliott Management to increase shareholder values through a standalone plan to cut expenses and increase capital expenditures, or a merger transaction. In response, the Commission opened a general investigation to protect the interests of ratepayers and provide KCC staff, stakeholders and Evergy an opportunity to collaborate and evaluate the STP. Four informational workshops were held and 1,472 members of the public submitted comments.
Today’s order directs Evergy to explain the increased spending in its 5-year projections and the impact it will have on rates in a Capital Plan filing due on February 28, 2022. In addition, Evergy is required to file reports on its key performance indicators so the Commission can determine if the company is executing the STP successfully and making progress toward regionally competitive rates and reliable electric service.
Today’s order can be viewed at http://estar.kcc.ks.gov/estar/ViewFile.aspx?Id=b39d5a81-97bf-4564-b069-d1583ff728ca
A recording of the Commission Business Meeting is available at
https://www.youtube.com/watch?v=Hzpv8kFi0WY