Evergy’s increased capital investment plan raises questions about impact on rates
WICHITA, Kan. (KWCH) - Evergy on Tuesday went before the state’s utility regulatory Tuesday after the Kansas Corporation Commission was among those raising concerns about a significant increase in projected spending.
Evergy’s five-year capital investment plan is calling for spending an additional $1.2 billion, a large portion of which is renewable energy projects. But with that come questions, namely about what this means for customers’ rates.
“We are never in a situation where we don’t want any investment. It’s all about understanding the level of investment, making sure the optimal investments are made and understanding the pace of investment” said KCC Commissioner Andrew French of the review on Evergy’s plan.
The KCC said increased spending by $1.2 billion is more than 20% beyond the plan Evergy presented last year. Evergy on Tuesday pointed to two significant elements for the increases. The first is inflation.
“The input costs for a lot of the key elements of our capital plan went up 40 to 50% if you look across steel and some other inputs,” said Evergy President and CEO David Campbell.
Evergy says that adds about $110 million. The company says its plan also calls for new renewable energy projects. New generation under the plan totals more than $500 million.
“Our analysis supports that will drive savings to customers over time. And that’s because the relative cost of renewables is lower in providing energy, in particular, relative to alternatives,” Campbell said.
A main reason for calling Tuesday’s meeting was to get to the bottom line of what all of this means for customers. Evergy said for those in central Kansas, rate projections when excluding fuel increases people’s bills 2.5 to 3% between 2022 and 2026. That increase is slightly lower than the previous plan projections.
Evergy said the Inflation Reduction Act passed earlier this year provides incentives for renewable energy, which will offset some of the costs. The KCC has to review any changes to rates, but Evergy hasn’t submitted a case based on this plan.
Evergy was one of the utilities approved for a settlement following the winter storm and cold snap in February 2021. Starting next April, the company’s central Kansas customers will see an increase of $2.82 per month on their bills for the next two years. Those in the Kansas City metro are receiving a credit of $6.60 for the next year.
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