KCC utilities director tells committee Evergy large-load tariff, rate settlement and generation approvals aim to protect captive customers

Justin Grady, director of the utilities division at the Kansas Corporation Commission, told the Committee on Energy, Utilities and Telecommunications that Kansas has kept relatively stable all-in electric rates while stressing the need to focus on household monthly bills when addressing affordability.

Grady summarized a recently adopted large-load power service tariff for customers greater than 75 megawatts. He said the tariff resulted from extensive technical discussions and day-long settlement negotiations with utilities, environmental groups, industry stakeholders and data-center representatives and culminated in a unanimous settlement. Important customer-protection features in the tariff, Grady said, include minimum 12-year contracts (often extended with load-ramp periods to 16–17 years), heavy demand-based billing, take-or-pay minimums set at 80% of contracted capacity, and strict creditworthiness and collateral rules (two years of minimum-bill collateral, which would be held as a regulatory liability for the benefit of other customers).

“Those customers will actually pay more for their electric service,” Grady said, describing the tariff’s design to place most fixed-cost recovery in demand charges rather than provide a discounted economic-development rate to very large customers.

Grady explained a cost-stabilization rider in the tariff that offsets economic-development discounts (EDR) and noted Senate Bill 98 already restricts discounts for data centers. He said the tariff includes carve-outs that allow exceptions for certain advanced-manufacturing projects that bring significant employment.

On Evergy’s rate case, Grady said the utility originally sought about $192 million in additional retail revenues; parties reached a unanimous settlement of $128 million, which he said equates to about a 6.6% increase (approximately $8.47 per month). Grady estimated about $103 million of that settlement would fund distribution and reliability projects rather than recover imprudent spending.

Grady also summarized KCC action on major generation dockets: the commission issued an order approving 50% ownership of two combined-cycle generating facilities and a 159-megawatt solar project in Douglas County. He listed the estimated sticker cost for one combined-cycle facility at roughly $1.6 billion for ~700 MW of capacity and said county-level litigation has delayed construction start.

On a newly filed base rate request from Empire District Electric, Grady said the utilities division is closely reviewing the filing because of the potential large customer-bill impacts for economically disadvantaged communities.

The committee engaged Grady on distributional questions about whether revenue from large-load customers will lower residential bills. Grady said additional revenue can reduce the burden on other customers through class cost-of-service studies but cautioned there is no single-day guarantee of a fixed residential-dollar reduction.

The committee did not take formal action on KCC items during this session. Grady provided contact information for staff follow-up and offered to furnish requested details such as transmission delivery charge totals for committee members.