Published August 9th, 2023 at 3:33 PM3 minute read
Retirees living on fixed incomes, and their advocates, say an Evergy plan to hike electricity prices in Kansas puts profits before people — with potentially dire outcomes for the well-being of older Kansans.
The company is asking the state’s energy regulators for permission to increase its annual revenue by about $218 million in Kansas. If regulators sign off, some of this extra revenue would go toward spending on new infrastructure and some would land in the pockets of shareholders.
Most of the new revenue would come from charging former Westar customers more on their electricity bills. Households in Westar’s former territory would see their monthly bills go up by more than $14 on average, Evergy has said. That’s compared to an average hike of about $3.50 in the former Kansas City Power & Light territory.
At a series of public hearings, customers pushed back.
“What kind of life are you setting for us senior citizens, who have given their whole entire life to the work environment?” Topeka resident Ella Dawson said. “We can’t afford to be stockholders. If we could, I would get into it. Buy me some of that stock and get that cash.”
The company said it has spent $675 million over the past five years on additions and improvements to its plants and electrical infrastructure in Kansas, and will make similar investments in the coming years.
Company officials are asking regulators to approve hikes in part to recover those costs, which included making the power grid more resilient in severe weather.
The company has its sights set on growth, too.
Executives told investors this month that they have a goal of growing profits by 6% to 8% a year across Kansas and Missouri. They hope to do that through a combination of cutting Evergy’s costs, increasing the price of electricity and selling more electricity.
Evergy missed its growth target the past two years. Wall Street forecasters think Evergy’s request to Kansas regulators would put it back on track, if approved. That’s according to a summary of expert analyses by Bloomberg.
Evergy paid out about $535 million to shareholders last year. Wall Street analysts predict that figure will grow about 6% annually over the next three years.
None of this comforts advocacy groups, elected officials and members of the public who warn that higher prices will take a toll on older Kansans.
State senator Oletha Faust-Goudeau, a Wichita Democrat, urged the energy company to look for ways to help people living on fixed incomes.
In last month’s brutal heat, she said, she knew of elderly people who were relying on box fans because they couldn’t afford air conditioning. She warned against making matters worse.
“If you raise the rates across the board,” she said, “some (people) will be able to pay and some won’t. And with this type of weather, deaths will incur.”
Glenda DuBoise, the state director for AARP Kansas, asked the Kansas Corporation Commission to “carefully scrutinize” Evergy’s proposal “to ensure that customers do not pay more than is justified.”
The KCC regulates Evergy and other utilities. Its commissioners will approve or reject the utility’s plan around the end of the year.
DuBoise said the company is asking for “a significant increase in what consumers might pay toward Evergy’s annual corporate profits.”
Evergy is a regulated monopoly serving about 1 million customers in the eastern half of Kansas. The utility also serves western Missouri.
In Kansas, it has to convince the KCC when it wants to raise its base charges. This process is meant to balance the for-profit company’s interests with that of the customers who pay the bills, all while also accounting for the public’s need for a modern and reliable power grid.
The KCC blocked any increases to base rates for five years as one of the key conditions to approving the 2018 merger between Topeka’s Westar Energy and Great Plains Energy, also known as Kansas City Power & Light.
The company known today as Evergy argues its proposed price hikes amount to less than inflation over those five years.
The utility also said it achieved savings through the 2018 merger that benefited customers by allowing it to keep the pace of its rising costs below inflation.
“We know that our customers would strongly prefer to not face cost increases,” Vice President Darrin Ives said at a public hearing last month, “and as I mentioned, we have focused on affordability.”
He said Evergy balances the need to keep electricity affordable and reliable, and that “we recognize the pressure faced by our customers in these high inflationary times.”
Ives said the former Westar and Kansas City Power & Light service areas continue to pay different prices because the systems were designed and built separately over the decades.
In written testimony, he attributed the much higher price hikes in the former Westar service area to several factors.
The area includes large swaths of rural Kansas, where it costs more to serve dispersed customers, he said. Other factors include Evergy losing revenue when three wholesale contracts expired.
The company’s proposed price hikes in Kansas would not change the rates in Missouri, but customers on that side of the state line will pay more for electricity during peak demand hours starting this fall.
Celia Llopis-Jepsen is an environment reporter for the Kansas News Service, a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.