House Committee on Energy, Utilities and Telecommunications 01/15/2026

Introduction of Committee Bill

Overview of the Meeting

• The meeting begins with an invitation for members to suggest changes to the agenda.

• Blaine Finch introduces a committee bill (RS number 26RS 2851) concerning the forced relocation of non-regulated utility facilities in public rights of way.

Update from KCC Director

Introduction of Justin Grady

• Justin Grady, director of the Utilities Division at KCC, is welcomed to provide updates.

• He mentions that there are significant pending dockets and plans to cover a substantial amount of material during his presentation.

Presentation Agenda

• Grady outlines the agenda, which includes updates on electric service affordability and regional rate competitiveness.

• He will discuss major dockets processed by KCC over the past year and recent developments at SPP.

Electric Rates Analysis

Historical Data on Electric Rates

• Grady presents updated data on Kansas's electric rates, emphasizing stability over nearly ten years.

• The data reflects total retail rate revenue divided by kilowatt hours sold, including all riders and surcharges.

Comparative Rate Stability

• Kansas has seen only a 9.72% increase in electric rates over ten years compared to a national average increase of 33%.

• North Dakota stands out for reducing nominal electric rates by 10%, attributed to increased electricity usage.

Rate Making Principles

Understanding Fixed Costs

• The discussion highlights fixed costs in utility services; efficient utilization can lead to lower rates.

• North Dakota serves as a case study demonstrating how effective growth and electrification can stabilize or reduce rates.

Current Positioning of Kansas Rates

• Kansas's electric rates have improved significantly, now sitting 15% below the national average after previously being higher than average.

Electricity Rates and Consumption in Kansas

Overview of Residential Electricity Costs

• The average monthly electricity bill for Kansans is $123.90, which is slightly below the regional average and nearly $20 less than the national average.

• A strong inverse correlation exists between average monthly consumption and rates; higher usage typically results in lower rates due to how costs are distributed among consumers.

Analysis of Monthly Consumption vs. Rates

• Texas stands out with both high electric rates and high usage, skewing data comparisons across states. This highlights the importance of considering both metrics when discussing affordability.

• Removing Texas from the analysis reveals clearer relationships between usage and pricing, emphasizing that understanding actual bills is crucial for discussions on rate affordability.

Comparative State Analysis

• States like Minnesota and Colorado have high rates but low consumption, leading to potentially lower overall bills compared to Kansas despite their higher per-kilowatt-hour charges. Conversely, Oklahoma, Arkansas, and North Dakota have lower rates but much higher consumption levels.

• The discussion reiterates that utility rate structures can significantly impact customer bills based on fixed costs distribution over varying consumption levels.

Historical Trends in Utility Bills

• Data from Evergy shows fluctuations in monthly bills over time, particularly a spike during 2022 linked to global events affecting natural gas prices, impacting wholesale market prices even for utilities not heavily reliant on gas.

• Over a decade (2014–2024), the average residential bill has increased by 12.69%, translating to a compound annual growth rate of 1.2%. In contrast, Evergy Kansas Metro maintained relatively stable billing trends throughout this period despite starting at higher initial rates.

Future Projections

• An upcoming electric rate increase for Evergy Kansas Central will add approximately $8.46 or 74 cents per month to customer bills starting around October 2025; this will be monitored in future presentations for updated insights into billing trends and impacts on customers' expenses moving forward.

Evergy's Large Load Power Service Tariff Overview

Introduction to the Tariff

• The discussion focuses on Evergy's Large Load Power Service Tariff, which is designed for customers with a demand greater than 75 megawatts.

• While often referred to as a data center tariff, it encompasses any large load customer exceeding the specified capacity.

Purpose and Benefits of the Tariff

• The tariff aims to protect captive customers in Kansas and enhance competitiveness in attracting large-scale customers.

• A unique procedural approach was taken, involving collaborative discussions rather than immediate litigation due to concurrent major dockets.

Collaborative Process and Settlement Agreement

• Extensive technical discussions were held over several months, leading to a unanimous settlement agreement among all major stakeholders in Kansas energy.

• Participants included environmental groups, the data center coalition, Google, and major utilities, all supporting the final work product.

Customer Eligibility and Prioritization

• The tariff applies to new customers over 75 megawatts or existing ones expanding beyond this threshold.

• Special provisions allow priority for advanced manufacturing facilities over data centers to ensure optimal capacity utilization.

Key Features of the Tariff

Contractual Obligations

• Customers must sign a minimum 12-year contract, typically extending up to 17 years due to optional load ramp periods.

Flexibility Provisions

• After five years, there is an option for customers to reduce their contract demand by either 10% or 25 megawatts—whichever is smaller.

Demand-Focused Rate Structure

• The tariff emphasizes demand-heavy rates designed to recover fixed costs incurred by utilities serving these large customers.

Financial Implications

• Customers will pay minimum bills based on 80% of their total contracted capacity demand regardless of actual usage during the contract period.

Power Service Tariffs and Customer Protection

Overview of Power Service Tariffs

• The speaker discusses the development of large load power service tariffs, noting that they drew from multiple existing models across the country to create a balanced approach.

• Emphasis is placed on crafting a tariff that protects customers while maintaining competitiveness for data center contracts and large load customer agreements.

Financial Implications for Customers

• Stringent creditworthiness standards require large customers to provide collateral equivalent to two years of minimum bills, potentially amounting to hundreds of millions of dollars.

• A cost stabilization rider is introduced, which offsets discounts provided under economic development riders, ensuring that large customers do not receive excessive benefits at the expense of others.

Rate Structure and Comparisons

• The proposed demand rates for these customers are significantly higher (50% more) than average industrial rates in Kansas, reflecting all costs associated with serving them.

• Despite having efficient load profiles, these customers will pay 16% to 19% more on their base rate due to new provisions aimed at equitable billing practices.

Benefits and Future Considerations

• The new tariff structure aims to enhance rate affordability in Kansas while protecting existing captive customers; it mirrors successful models from other states.

• The speaker briefly mentions slides outlining voluntary options for carbon-free energy sourcing and potential collaborations with companies like Meta for advanced nuclear reactors.

Policy Discussions and Open Approaches

• High-level policy discussions indicate an ongoing debate about whether utilities should serve data centers, highlighting an openness to innovative solutions within regulatory frameworks.

Electric System Planning and Customer Benefits

Overview of Electric System Planning

• The discussion emphasizes the importance of proper customer charging and contractual provisions to benefit existing captive customers in electric system planning.

Large Load Power Service Tariff

• The speaker explains that Evergy does not have to serve all customers, allowing self-generation without permission from the Kansas Corporation Commission (KCC), although interest in this is low.

Challenges of Self-Generation

• It is noted that replicating the reliability of the energy grid independently is challenging due to maintenance needs and costs associated with power plants.

Tariff Provisions for Generation Credit

• The tariff includes elements for customers who bring their own generation, allowing them to receive credits while still contributing to overall system utilization.

Misconceptions About Incentives

• Clarification is provided that the tariff applies only to two major utilities, countering public misconceptions about it being an incentive program aimed at attracting data centers. Customers will pay more for electric service under this framework.

Support from Major Entities

Framework Stability for Data Centers

• Google and the data center coalition support the tariff as it provides a stable framework for potential operations in Kansas, requiring local approvals but focusing on electric service aspects.

Updates on Generating Facilities

Approval of New Facilities

• An update reveals that a commission order approved ownership of combined cycle generating facilities and a solar facility, marking progress in energy infrastructure development.

Cost Considerations

• The estimated cost for building new efficient generating facilities stands at approximately $1.6 billion, highlighting concerns over high expenses leading to varied opinions among stakeholders.

Solar Facility Development Status

Consensus on Solar Investment

• There was unanimous support among parties involved regarding the Kansas Sky Solar Facility's approval due to its potential reliability benefits despite limited utility-scale solar presence in Kansas.

Ongoing Legal Issues

• Current litigation at the county level has delayed significant construction on the solar facility, impacting its timeline for development.

Evergy Rate Case Update

Recent Rate Increase Request

• Evergy filed a request for a $192 million increase in retail revenues during last year's legislative session; this marks their second base rate increase request within 21 months.

Settlement Agreement Insights

• A unanimous settlement agreement was reached among all parties involved in the rate case, indicating collective support for the rates now being charged.

Settlement Agreement Overview

Key Details of the Settlement

• The settlement agreement totals $128 million, resulting in a 6.6% increase in retail customer bills, equating to approximately $8.47 per month.

• A significant portion of this increase, $103 million, is allocated for real infrastructure improvements aimed at enhancing reliability across the service territory.

• No parties involved in the case presented evidence suggesting that Evergy's spending was imprudent or unnecessary, leading to a unanimous settlement agreement.

Questions and Clarifications

• There were inquiries regarding whether large load customers would actually lower rates for residential customers, with some skepticism about claims made during the rate case discussions.

• It was clarified that large load customers will pay an all-in rate that is 8% to 10% higher than average industrial rates, which may indirectly benefit residential customers by maintaining baseline costs.

Revenue Distribution and Rate Implications

Understanding Revenue Allocation

• The additional revenue generated from large load customers will be factored into cost-of-service studies, impacting how rates are distributed among all customer classes.

• While it cannot be guaranteed that residential bills will decrease immediately upon serving new data centers, there is an expectation that overall burden on other customers may lessen due to increased revenue streams.

Competitive Rate Analysis

• Concerns were raised about potential disparities between Evergy Central and Evergy Metro rates, particularly as projected increases could make Evergy Central rates higher than those of its counterpart for the first time. This situation could affect competitiveness for businesses in certain regions compared to others in Kansas.

Economic Development and Utility Rates: A Discussion

Understanding the Discrepancy in Utility Rates

• The speaker questions why areas with new economic developments, like chip factories, have lower utility rates compared to towns that missed out on such opportunities.

• The response highlights that electric utility rates are determined by a cost of service model, relying on substantial evidence presented during rate cases.

• The speaker emphasizes their extensive experience in electric rate cases since 2005, indicating a rigorous evidentiary process is involved in determining rates.

• It is noted that Evergy Kansas Central has a lower customer density and more extensive infrastructure than Evergy Kansas Metro, impacting maintenance costs.

• The discussion points out that older equipment and the need for maintenance contribute significantly to the higher costs faced by Evergy Kansas Central compared to its metro counterpart.

Factors Influencing Transmission Costs

• A significant portion of transmission delivery charges stems from Evergy's decision to rebuild aging infrastructure rather than mandates from the Southwest Power Pool (SPP).

• The speaker mentions that much of the existing transmission infrastructure dates back to the mid-20th century and requires replacement due to age.

• In contrast, Evergy Kansas Metro operates within a compact urban loop with minimal transmission needs, leading to lower associated costs.

Historical Context of Rate Stability

• KCPL's investment in the IOTM-2 power plant in 2010 was substantial ($2 billion), which initially led to higher rates but contributed to long-term stability as they managed excess capacity effectively.

• Higher initial rates can lead to greater stability over time; this trend may result in future increases for Evergy Kansas Central as it catches up with metro rates.

Legislative Insights and Future Considerations

• Acknowledgment from legislators indicates appreciation for high-level insights into complex utility rate structures while recognizing ongoing discussions will continue later.

• Clarification sought regarding whether potential new facilities (like those for sports teams) would fall outside the current utility system managed by Evergy.

Transmission Planning and Regulatory Oversight

• Request made for detailed information on total transmission delivery charges, highlighting legislative interest in understanding these financial components better.

• Transitioning back into technical discussions about integrated transmission planning conducted annually by SPP under federal regulations ensures reliability and economic efficiency across regions.

• Emphasis placed on how rapidly changing public utility landscapes necessitate regular assessments; recent years have seen significant shifts affecting long-term forecasts.

Stakeholder Involvement and Transmission Projects

Overview of Stakeholder Process

• The stakeholder process involved extensive travel to Little Rock, with multiple Kansas stakeholders participating in discussions. The speaker emphasizes their role as one among many contributors rather than taking sole credit for the outcomes.

Approved Transmission Facilities

• In early November, the board approved $8.5 billion for regional transmission facilities, including a significant portion dedicated to 765 kV lines, which are currently absent in SPP (Southwest Power Pool).

Financial Adjustments and Project Revisions

• Initial proposals called for $18.1 billion in new transmission; however, this was revised down through stakeholder meetings to $11 billion and finally to $8.5 billion based on consensus regarding essential projects.

Future Growth Projections

• There is confidence that electric grid demand will increase by at least 25% by 2030. SPP warns that without significant upgrades to transmission infrastructure, costs for customers will rise.

Benefit-Cost Ratios and State Impact

• The original portfolio had an average benefit-cost ratio of 6:10 across the region but was not evenly distributed; Kansas faced a negative impact initially, prompting increased advocacy from local stakeholders.

Reliability Projects and Economic Considerations

Importance of Reliability Projects

• The projects receiving notices to construct were deemed critical reliability projects that could not be delayed; economic evaluations will follow next year as part of a broader analysis.

Ongoing Discussions on Future Projects

• Although some proposed projects did not receive immediate approval, they may re-emerge after further analysis and stakeholder engagement over the next year.

Transmission Line Challenges

Need for Additional Generation

• SPP acknowledges that while additional transmission is necessary, it cannot solve all issues alone; local thermal generation must also be integrated into planning models.

Real-world Reliability Issues

• Historical events demonstrate how reliability issues in distant regions can affect Kansas. Controlled load shedding occurred even during mild weather conditions due to system strain.

Engineering Insights on Transmission Lines

Advantages of 765 kV Lines

• Engineering professionals indicate that one 765 kV line can replace three double circuit or six single circuit 345 kV lines, presenting a cost-effective solution for major reliability challenges.

Land Use Concerns

• Building these large transmission lines poses challenges due to landowner resistance; policymakers need to consider the implications of requiring substantial easements for construction.

Transmission Planning Insights

Stakeholder Engagement and Project Evaluation

• The speaker reflects on the importance of evaluating transmission easements, questioning whether a single 200-foot swath is preferable to multiple smaller ones across the state.

• A comparison of maps reveals that the benefits-cost ratio for projects increased from six to ten, indicating improved project evaluations leading to deferrals of less beneficial projects.

Load Forecasting Trends

• The speaker emphasizes the effectiveness of stakeholder processes in shaping outcomes, encouraging those not directly involved to seek insights from participants.

• Current transmission builds focus solely on necessary infrastructure while ongoing evaluations will continue for future needs.

Projections and Reliability Models

• The bottom red line in a complex graph represents 10-year load projections based on utilities' estimates from the 2023 Integrated Transmission Plan (ITP).

• Initial forecasts predicted only 2000 megawatts of growth over ten years; however, subsequent updates revealed a year-one forecast of 58 gigawatts, highlighting significant underestimations.

Changes in Load Forecasting Methodology

• In the 2025 ITP, two lines represent different reliability models: one conservative (brown line), required by NERC, and another more optimistic (yellow line).

• Current base reliability models now exceed previous extreme forecasts by a considerable margin, suggesting rapid changes in load growth expectations.

Future Demand Projections

• By 2034, projected load increases could reach up to 72 gigawatts based on current reliability models—this represents a substantial increase without accounting for additional spot loads.

• Including potential spot loads tied to advanced manufacturing contracts could push demand estimates beyond 110 gigawatts—a staggering increase reflecting real-time developments in energy needs.

Implications for System Reliability

• A slide presented indicates that with increased demand (33% rise), without adequate transmission infrastructure from the ITP, reliability issues may lead to frequent load shedding events.

• The legal standard set by FERC allows only one day of load shedding every ten years; however, projections suggest up to 114 days per year could occur if no new infrastructure is built.

This structured summary captures key discussions around transmission planning and forecasting trends while providing timestamps for easy reference.

Average Residential Impact of Transmission Costs

Overview of Cost Estimates

• The initial tables present the average residential impact, focusing on a conservative estimate meant to represent a worst-case scenario.

• Building $8 billion in transmission will cost an average residential customer approximately $2 per month by 2034, while projected economic benefits could yield $5.31 monthly savings.

Future Projections and Benefits

• In a more optimistic planning scenario (Future Two), the benefits increase significantly, with an average benefit of $2.32 per month from fuel savings expected by 2034.

• The cost for Kansas residents is projected to decrease due to anticipated load growth in North Dakota, South Texas, and Oklahoma.

Transmission Usage and Economic Implications

Understanding Payment Structures

• Transmission costs are shared based on usage over the past year; if others' usage increases, individual costs may decrease.

• Without adequate transmission infrastructure to handle increased loads (e.g., adding 50 Gigawatts), higher wholesale energy prices are likely.

Stakeholder Engagement and Representation

• Questions arise regarding Kansas's representation in SPP decisions; local utilities like Evergy play significant roles in advocacy and planning processes.

Challenges in Transmission Planning

Map Approval and Stakeholder Concerns

• The approved map differs from initial proposals; stakeholders advocated for alternative termination points for transmission lines to better serve Kansas.

• Target areas were chosen based on previous load shedding incidents; different target areas are evaluated during each Integrated Transmission Plan (ITP).

Reliability vs. Economic Development

• Concerns exist that building robust transmission systems primarily in southern regions may disadvantage Kansas economically.

• A comprehensive evaluation of a wider 765 kV overlay is planned for 2026, but it faces resistance due to high estimated costs ($40-$60 billion).

Financial Considerations in Transmission Projects

Cost-Benefit Analysis

• Initial estimates indicated an $18 billion portfolio focused on specific substation connections; broader projects would significantly escalate costs.

• Stakeholders expressed concerns about the financial implications of large-scale projects, emphasizing cautious incremental development rather than overwhelming expenditures.

Impact of Load Growth and Plant Retirements on Energy Generation

Overview of Load Growth Expectations

• The speaker expresses amazement at the expected load growth over the next 10 to 15 years, highlighting concerns about projected plant retirements and larger reserve requirements impacting future generation needs.

Utility Responses to Plant Retirements

• Discussion on how individual utilities within the SPP region have slowed down the retirement of dispatchable thermal generation due to various signals from SPP regarding planning reserve margins and accreditation standards.

Changes in Planning Reserve Margins

• SPP has increased its planning reserve margin (PRM) from 12% to 15% in 2023, with plans for further increases to 16% in 2027 and 17% in 2029, indicating a response to load growth forecasts and reliability needs.

Infrastructure Developments

• Utilities are beginning to build advanced infrastructure, including approximately 15,000 to 20,000 megawatts of new thermal generation capacity aimed at enhancing reliability for continuous operation throughout the year.

Role of Renewable Energy Sources

• The current lack of solar energy in SPP is noted; however, increasing solar capacity combined with battery storage could improve overall reliability as part of future energy strategies.

Resource Adequacy Studies and Future Projections

Stakeholder Communication on Resource Adequacy

• Reference made to slide 34 which outlines SPP's communication strategy addressing stakeholder concerns regarding resource adequacy amidst changes like those proposed by policy initiative 765.

Visual Data Representation

• Slides 37 and 38 illustrate critical data related to planning reserve margins required for maintaining reliability versus potential outcomes without policy intervention or utility action.

Reliability Crisis Mitigation Strategies

• Slide analysis indicates that if utilities implement their planned projects, it may prevent a reliability crisis; contrasting scenarios show risks associated with retiring plants without replacements.

Implications of Policy Changes

• The discussion emphasizes that without proactive measures from utilities or regulatory bodies, meeting reliability standards by summer of 2027 will be challenging due to ongoing plant retirements.

Expedited Resource Adequacy Study Process

Approval Process Insights

• The expedited resource adequacy study process allows utilities priority access for building necessary generation facilities essential for maintaining system reliability over the next few years.

Upcoming Infrastructure Projects

• Mentioned are two combined cycle generation facilities included in the ERAS study that are expected online soon, contributing significantly towards addressing upcoming reliability challenges.

Transmission Line Developments: Buffalo Flats to Delaware

Community Engagement Efforts

• Recent public hearings were held concerning the Buffalo Flats to Delaware transmission line project; efforts are being made by staff engineers to address landowner concerns effectively before finalizing routes.

Legal Standards and Route Mapping

• A legal framework guides commission rulings on transmission lines; an interactive map is available for stakeholders interested in viewing proposed routes visually through Google Earth.

Winter Storm Elliott and Its Impact on Reliability

Overview of Winter Storm Elliott

• The transmission line was designed to address reliability issues that arose during Winter Storm Elliott, which occurred on Christmas Eve 2022.

• This storm caused widespread load shedding for millions in the Eastern U.S., but SPP avoided this due to having 20,000 megawatts of wind energy available.

Effects of Severe Weather Conditions

• The storm featured high winds (50 mph) and rapid temperature changes, leading to voltage overloads and collapses in regions like Southeast Kansas and Northeast Oklahoma.

• A utility serving Kansas had to shed load because their transmission lines could not handle the demand from the Eastern interconnect, highlighting interconnectedness across states.

Transmission Line Developments

• The newly designed transmission line aims to prevent severe reliability issues similar to those experienced during Winter Storm Elliott.

• Another upcoming project is the Holcomb to Sydney line, engineered specifically to manage north-south power flows that overloaded Kansas's transmission lines during Winter Storm Uri.

Concerns Over Base Rate Increases

Empire District Electric Base Rate Case

• A recent base rate case filed by Empire District Electric indicates a concerning level of proposed increases affecting customer bills.

• Despite a request for a phased increase over three years, there are concerns that this timeline is insufficient for economically disadvantaged Kansans who may struggle with higher electric service costs.

Commitment to Customer Advocacy

• Significant resources will be allocated by the Utilities Division to ensure that customers do not pay more than necessary while maintaining reliable electric service.

Engagement and Future Discussions

Invitation for Questions

• An invitation was extended for questions or concerns from constituents regarding the discussed topics.

Upcoming Presentations

• Lanny Nichol, CEO of Southwest Power Pool, is scheduled for a presentation on January 20th, indicating ongoing discussions about power management and reliability.