The utility company formed by the merger of Kansas City Power & Light and Westar Energy operates with nationally competitive electricity prices that will gradually draw closer to lower retail rates assessed in most neighboring states, a company executive said Tuesday.
Chuck Caisley, senior vice president of Evergy, told a House committee complaints about excessive electric rates in Kansas didn't take into account massive investment by the Kansas companies in renewable sources of power or compliance with federal mandates on emissions from coal plants. Not all peer states with less costly electricity have confronted these capital investments, he said.
"I want to be very clear. KCP&L and Westar, the new combined Evergy, are extremely concerned about Kansas rate competitiveness," Caisley said. "Contrary to what's been said, we're not just waiting around for other states to 'catch up' with Kansas."
Caisley said KCP&L and Westar Energy submitted a rate study to the Kansas Corporation Commission revealing electricity prices were in line with national averages and had entered a period of stability. The study showed price advantages Kansas consumers had enjoyed were now eroding because of flat or falling power consumption by industry, a drop in export sales of energy, influence of modest natural gas prices, mandated environmental retrofits to coal plants, as well as transmission infrastructure and wind farm investment.
He said the company had a vested interest in offering rates attractive to companies being recruited to Kansas while also providing a reliable service to consumers that generated a reasonable rate of return for investors.
Evergy, created in 2018 by the merger, assumed a more visible lobbying presence early in the 2019 legislative session. It was in reaction to a request from lawmakers and special interest groups for the Legislature to initiate an independent study of Kansas residential and commercial electric rates.
Rep. Annie Kuether, D-Topeka, said the state of Kansas had a lousy record of pressing utility companies to make energy efficiency gains. The Legislature ought to require improvements if power companies continue to neglect efficiency programs, she said.
"We are so far behind in this area," Kuether said. "I certainly hope you will march forward on this."
Kansas Industrial Consumers Group, critical of KCP&L and Westar rates, urged the Legislature to order a comprehensive analysis of electricity pricing. The cost of electricity in Kansas is higher than in Colorado, Missouri, Nebraska and Oklahoma, the group said.
KCP&L's retail electricity rate increased 72 percent from 1992 to 2017, while Westar's rate went up 64 percent during that period.
Caisley said it wasn't necessary for the Legislature to wade into the rate issue. He also said critics were using deceptive charts to influence public opinion on rate differentials with other states.
Caisley said the merger of Westar and KCP&L led to rate reductions of $60 million annually. The merger accepted by the KCC prohibited base rate changes for five years, through December 2023.