KCC issues first order on recovery of February weather event costs
TOPEKA – Today, the Kansas Corporation Commission (KCC) issued the first of several utility-specific orders addressing customer payment of deferred energy costs related to the February 2021 winter weather event. On February 15, the KCC ordered regulated utilities to do everything possible to continue providing power and natural gas service to their customers in spite of skyrocketing natural gas prices. Utilities were instructed to defer any extraordinary costs and then propose a plan to recoup the charges over time to reduce the financial impact on customers. Each plan would require Commission approval.
The first of the payment plans to be considered by the Commission, submitted by American Energies Gas Service, was approved this morning. The company, which supplies gas service to approximately 200 customers in Harvey, McPherson, and Marion counties, reported $317,914 in extraordinary costs for the weather event, inclusive of carrying costs to finance the delayed recovery plan. For context, that is more than the utility typically collects in total annual revenues from customer billing. Under the plan, American Energies customers have the option to make monthly payments over a 5-year period or make a lump sum payment. If a customer chooses to make a lump sum payment, they will avoid the monthly carrying charges over 60 months. The payment amounts are based on individual customer usage during February 2021.
In light of ongoing state and federal investigations into the higher than normal February prices for natural gas, provisions are being included in each payment plan to protect ratepayer interests while still allowing utilities to begin recouping service costs.
“These investigations take time, and we don’t know when they will be completed. In the event there is a finding that the market price was unjust or the result of market manipulation, we make it crystal clear to utilities in these agreements that those proceeds will go back to the individual customers that are paying their bills today,” said Justin Grady, KCC Chief of Revenue Requirements, Cost of Service, and Finance.
An agreement on a plan proposed by the City of Eskridge is currently pending before the Commission while plans submitted by Southern Pioneer, Black Hills Energy, and Evergy are still being evaluated by KCC staff. Atmos, Empire, and Kansas Gas Service have not yet filed plans.
A recording of today’s Commission Business Meeting is available on the KCC You Tube channel.