The Kansas Corporation Commission gave Evergy the go-ahead to build two natural gas plants and a new solar plant, over the objections of multiple parties.
Evergy Kansas Central customers will see bills increase about 8.6% to build the new plants, KCC filings said.
EKC, the subsidiary of Evergy Inc. that serves Kansas customers, will be 50% co-owner of the two 710-megawatt combined cycle gas turbine plants and 100% owner of the Kansas Sky solar facility, to be built in Douglas County. The Viola gas plant will be built in Sumner County, and the McNew gas plant will be in Reno County.
Cost of construction is estimated to be $788.75 million for the Viola plant and $800.52 million for the McNew plant, according to EKC’s filings. The solar field is expected to cost $228.1 million.
The other half of the two natural gas plants will be owned by Evergy Missouri West, but only if the Missouri Public Service Commission — KCC’s Missouri counterpart — approves the construction.
The Missouri commission’s staff has recommended against pre-construction approval because too many costs in the proposal were uncertain, according to Missouri Public Service Commission filings.
Rate concerns
The decision to build the natural gas plants was opposed by the Citizens’ Utility Ratepayer Board, industrial consumers and environmental groups, among others. In general, most agreed with building the solar plant, according to documents filed at KCC.
Commissioners also made note of their concerns about Evergy rates.
“The commission is concerned and troubled by the frequency and magnitude of rate cases, and strongly encourages Evergy to focus on pacing its proposed investments to better align those investments with actual load growth and the mitigation of large rate increases,” said Commissioner Dwight Keen at Monday’s virtual hearing.
Keen said that while the commission approves the addition of generation capabilities to meet the needs of Kansans and ensure stability of the power grid, they remain concerned about rate increases. Evergy currently has a separate rate case at KCC, asking for as much as a 15% hike to residential rates, which would be on top of the increase from building the plants.
Evergy last received a $41 million rate hike in 2023.
“The commission understands that from time to time, new investment in electric capacity is needed to support reliability and economic development in Kansas,” he said. “However, affordability and genuine maximum capacity needs must be major priorities and proactively pursued as Evergy addresses a seemingly endless list of ostensibly justifiable projects and initiatives.”
His words were matched by opponents to building the natural gas plants.
Opposition
Jim Zakoura, president of the Kansas Industrial Consumers Group, said Evergy has enough generation to meet electricity demand if current electricity systems, such as coal plants, are not retired before the end of their useful manufacturing life.
“Evergy’s plans to retire coal facilities early, while those facilities continue to provide electric service at costs which are far lower than new gas-fired generation, is not related to increased electric demand,” Zakoura said in a statement. “It is simply trading low-cost generation for high-cost generation to serve the same level of demand. Retail ratepayers get no greater value for their money — only higher prices.”
KCC staff and commissioners don’t agree.
“The oldest of the Jeffries units was commissioned in 1978 and will be over 50 years old if the proposed Viola combined cycle gas generation plant comes online in 2029,” Keen said. “It is impossible to know the exact timing of when coal units will retire. Load growth may require their lifespan to be extended, or environmental policy changes or technological advances may shorten their lives.”
Keen said an October 2022 fire at the Jeffrey Energy Center in Pottawatomie County caused that unit to be out of service for more than a year.
Officials with the Sierra Club, which testified in the Missouri Public Service Commission case for Evergy’s proposed plants and not in the Kansas case, said ratepayers are being asked to take on costs and subsidize a billion-dollar industry.
“Governor Kelly and KCC Commissioners supported and approved these gas plants, and now they have the opportunity to ensure that utilities and data centers pay their fair share, because the alleged new demand for electricity is from data centers, not Kansas families or existing businesses,” said Zack Pistora, director of the Kansas chapter.
Dorothy Barnett, executive director of the Climate + Energy Project, expressed concerns that natural gas prices are difficult to predict.
“I am really worried that we are going to push ourselves into a really risky position with fossil fuels,” she said. “I obviously am concerned about the climate impacts of adding fossil fuels, right? But secondarily, gas prices are so volatile. We saw that with Winter Storm Uri. It’s supply and demand.”
Winter Storm Uri brought arctic weather to the Midwest in February 2021, resulting in increased utility prices for most customers after natural gas prices shot high because of production problems and high usage.
Costs of natural gas are a “straight pass-through” from the utilities, she said. She referred to Empire District Electric, which in 2007 served southeast Kansas.
“They were heavily invested in gas and people couldn’t pay their bills,” Barnett said. “They were one of the first utilities that began to invest in wind in Kansas. It wasn’t because they cared about the environment or cared about clean energy. It was because they were trying to diversify their fuel mix so that they weren’t reliant on gas.”
Evergy spokeswoman Gina Penzig said in a statement the company is pleased with KCC’s approval to help ensure system reliability.
“Kansas and Missouri are experiencing record economic growth, and today’s predetermination order affirms that the plants are needed to serve customers and are an efficient way to meet the growing demand,” she said.
This story was originally published by the Kansas Reflector.
