Members of the Kansas Senate agreed on compromise legislation Wednesday to authorize an independent $1 million study of retail rates charged by electric public utilities.
Utility companies had objected to demands for analysis of whether electric rates in Kansas were regionally competitive, but the bill advanced by the Senate would require that a bipartisan council of House and Senate leaders select a firm or organization to perform the study scheduled to be completed in 2020.
The Kansas Corporation Commission, the state’s utility regulator, would have to cooperate with any entity hired to conduct the study. The report mandated by Senate Bill 69 would be paid for by utility companies, which could pass the cost to consumers.
“We have some of the highest rates in the region. There’s been a lot of interest in evaluating what’s really driving that,” said Sen. Ty Masterson, an Andover Republican and chairman of the Senate Utilities Committee.
He said the KCC and Evergy, the combined company of Westar Energy and KCP&L, published reports on electric rates in Kansas. The third-party study, he said, would provide information to the Legislature that could be used to protect ratepayers.
Sen. Rob Olson, R-Olathe, said he was concerned opponents of the study suggested its cost could balloon to over $2 million. He shared apprehension that deadlines in the bill wouldn’t give consultants sufficient time to complete the first phase of the project in January and the second phase in July 2020. In addition, Olson said, KCC staff members should be involved in development of the rate study.
“I want to make sure we get this study done and done right,” said Olson, who was removed as the committee’s chairman before the 2019 legislative session. “I don’t want my consumers paying for a fourth-rate study.”
Under the Senate’s bill, the initial phase of the proposed study would examine whether the current rate-setting process influenced utility capital investments, balanced utility profits and public-interest objectives, expenditures in transmission and renewable energy resources, and examine the regional competitiveness of Kansas’ rates.
The second phase of the recommended study would explore how electric public utilities accounted for installation of charging stations for electric vehicles, how investment in transmission infrastructure influenced utility rates and the impact of electric rates on economic development.
Study topics were negotiated by utility companies, environmentalists, business executives and lobbyists before being vetted by the Senate Utilities Committee.
“Yes, I agree it’s not perfect,” said Sen. Tom Hawk, D-Manhattan. “Focus on this as another area we can use to make Kansas more attractive both for the citizens we represent and the businesses we have here and the businesses we’re going to attract.”
Sen. Julia Lynn, an Olathe Republican, said she endorsed the study as a first step in dealing with rates viewed as excessive by consumers. It is imperative that lawmakers show constituents their complaints were being addressed by the state, she said.