Missouri utility regulators on Thursday approved Evergy’s request to build three natural gas plants and two solar farms, freeing the company to move forward with infrastructure projects that will cost more than $2.75 billion.
The four-member Missouri Public Service Commission board approved the facilities after hearing presentations about the facilities two weeks ago and despite worries about investing in solar energy.
“Personally, the solar case is concerning,” said MPSC chairwoman Kayla Hahn. “I recognize that we need more generation, and in particular, Evergy West needs more generation. However, intermittent resources such as solar as standalone projects seem to make little sense and may not be the best choice in terms of resource planning and the best use of ratepayer dollars.”
Hahn said her concerns were pertinent in light of federal changes to green energy tax credits, among other issues. The state faces conflicting issues with the need to build replacement and additional generation and the need to keep rates affordable, she said.
“It’s increasingly important that a critical view is taken of any request for new generation,” Hahn said. “Because we are in a situation where the need for additional generation for Evergy West, who has been and continues to be short on its own generation, is so great, I’m not going to stand in the way of allowing more generation resources to be added.”
Evergy announced last year its intent to build the gas plants — two in Kansas and one in Missouri — and the solar plants, one in each state. The company sought pre-approval for the projects through Kansas and Missouri regulators.
They received approval from the Kansas Corporation Commission in early July.
Evergy Missouri West, the Evergy subsidiary serving Missouri customers, and Evergy Kansas Central, which serves Kansas customers, will own 50% each of the two Kansas gas plants. The two 710-megawatt facilities, located in Sumner and Reno counties, are expected to cost $788.75 million and $800.52 million, respectively.
Evergy Missouri West will own 100% of a 440-megawatt natural gas facility in Nodaway County, Missouri, with a price tag of $835 million. It will also own Foxtrot Solar Energy, a 107 megawatt solar farm in Jasper County, Missouri, estimated to cost $213.8 million.
Evergy Kansas Central will own 100% of a 75-megawatt solar farm, Sunflower Sky Solar Project, in Wilson County, Kansas, estimated to cost $128.8 million.
Darrin Ives, Evergy vice president of regulatory affairs, told MPSC commissioners Thursday there had been “a lot of movement” about tax credits and tariffs at the federal level.
“At this stage, we still need some information from the Treasury,” he said. “But by and large, with the budget reconciliation bill, they’ve set up a path and a plan that, while it’s scaled back significantly the IRA (Inflation Reduction Act) subsidies around carbon-free generation, it has left a pathway for these projects.
Ives said there’s also a pathway to complete the project by the end of 2027 and still qualify for tax credits. Ives said the issues were part of settlement discussions, and Evergy will be required to give updates on any changes with tax credit availability, among other reporting requirements.
In a press release after the MPSC decision Thursday, the Sierra Club said it opposed Evergy’s proposal. The nonprofit intervened in the MPSC case.
“No party, except Evergy, argued that the gas plant proposals are economically feasible, a critical factor in the MIssouri approval process,” the release said.
““If Evergy’s application is approved as submitted, Missouri ratepayers will be on the hook for gas plants that are likely to be unprofitable, operate less than expected and incur high maintenance costs or even premature failure due to excessive generator starts and cycling,” testified Michael Goggin, a Sierra Club expert witness, before MPSC.
Billy Davies, Sierra Club’s Missouri chapter organizer based in Kansas City, said in the press release that Evergy shareholders, rather than ratepayers, should shoulder the costs of generation expansion.
“Sadly, the PSC is enabling utilities and multi-billion dollar tech companies to use average Missouri families as piggy banks to power new data centers,” Davies said. “The last hope for the commission to protect Missouri families from utility bill shock is to have a strong large user fee that ensures multi-billion dollar tech companies pay their fair share of these new power plants being built in the name of their data centers.”
Evergy spokeswoman Gina Penzig said the company was pleased the MPSC approved the plants.
“Current construction schedules should allow the solar plants to benefit from federal tax credits, and those benefits will be passed to customers served by the plants,” she said.
Tariff levels are changing frequently, so it is difficult to quantify their effect on the projects, she said.
“If they stay in place over a long term, the cost of capital projects like new generation would increase,” Penzig said. “As we negotiate contracts with suppliers, we are always focused on keeping our costs low because that impacts our customers’ rates. Some aspects of the new generation projects are already under contract.”
