Evergy tells committee tariff, long contracts and collateral protect customers from data‑center load

Evergy representatives told the Committee on Commerce, Labor and Economic Development that the company has taken steps to protect existing customers from the potential rate effects of large new data-center loads. Chuck, an Evergy representative, described a recently approved large-load power service (LLPS) tariff and said it was specifically designed to limit the kind of rate spikes seen in some Eastern U.S. markets.

Chuck explained the LLPS has multiple features intended to shift the risks of new, very large loads onto the new customers. He described a demand-charge premium that applies to data centers and other large-load users (he characterized part of the premium as "almost 30%" in certain components), a requirement that qualifying customers sign long-term contracts (a 17-year commitment composed of up to five years to build and an incremental 12-year operating term), and collateral and parental-guarantee requirements he estimated in the "vicinity of $300 to $500 million." "If a data center is going to come here...they're responsible for the rest of the 17 years of the contract," he said, explaining the design is meant to prevent customers from leaving after Kansas pays to build the assets that serve them.

Chuck said the tariff is a KCC‑adopted tariff (not a statute) and that the premium paid by new large customers would be applied in later rate cases so that existing residential, commercial and industrial customers share less of the rate-case burden. He used a simplified example to illustrate how new large customers can both raise investment needs (numerator) and add significant new energy usage (denominator), changing per-unit rates depending on the balance of investment and load growth. Evergy noted that, while the company currently peaks near 10 gigawatts, more than 15 gigawatts of large-load interest is in its queue — an opportunity that, if properly managed, Evergy says could offset system costs.

Committee members asked technical and policy questions during a lengthy exchange, including whether the premium/division of benefits is written in statute or tariff (Chuck: tariff), how water use is handled for data centers (Chuck: many use closed-loop systems with roughly 90% recycling efficiency and are working with municipalities to reuse treated water), and what would happen if transmission-delivery charges were removed (Chuck warned of credit-rating downgrades and more frequent rate cases). The chair thanked the witness after the questioning.

Why it matters: Data-center projects can require large capital investment in generation and transmission; tariff design, contract terms and collateral help allocate financial risk and protect incumbent ratepayers, the company said. The committee heard that Kansas' approach may be among the first of its kind and that other states are watching.

Next steps: The exchange was informational; no committee action was taken on the tariff itself during this meeting.