After winter storm, some Evergy customers could see savings while others pay for years

Missouri customers outside the Kansas City area could see their bills increase by a few dollars for 15 years.

By: - July 8, 2021 9:00 am

Ameren Missouri is seeking a rate increase worth nearly $300 million. (Sherman Smith/Kansas Reflector)

Evergy customers in parts of Missouri may be repaying electric costs for the next 15 years following February’s winter storm that forced power outages across the Midwest

Kansas City-area customers in both Kansas and Missouri, however, could see savings.

In February, Winter Storm Uri caused sustained cold temperatures across much of the central United States, driving demand for energy sky high. At the same time, utilities had trouble getting natural gas. In some places, coal piles froze. Wind turbines iced over. 

For several days, utility companies asked customers to conserve their energy use. To keep the grid stable and avoid uncontrolled outages, the Southwest Power Pool, the regional grid Evergy belongs to, asked member utilities to implement rolling blackouts.

Now, Evergy is totaling the financial impact of the storm. In the greater Kansas City area, Evergy was able to generate more power than it needed during the cold snap and sell the excess into the SPP. That helped offset the higher prices it had to pay to serve the region, and the utility plans to return those proceeds to customers over the next couple of years.

But customers outside the metro in Kansas could gradually repay $152.3 million over two years. In parts of Missouri outside the metro, the company is asking to defer and then recover more than $297 million — potentially over 15 years. If Evergy didn’t spread those costs out over time, customers’ bills would be astronomical, said Lena Mantle, a senior analyst with the Missouri Office of the Public Counsel.

“That was unprecedented. That has not occurred since — well, ever that I remember,” Mantle said. 

Evergy’s Missouri West area, which stretches from the Iowa border south along the Kansas border nearly to southwest Missouri, was hit the hardest by high February costs. Documents on file with the Missouri Public Service Commission show that area incurred more than triple its normal fuel costs. It purchased $316.8 million in power — more than 21 times its average $14.8 million for February. 

After adjusting for other costs and channels of revenue, the area incurred $297.3 million in extraordinary costs. 

Evergy filed last week with Missouri regulators for an “accounting authority order,” which allows it to defer the sum it will collect from Missouri customers related to the storm. 

To spread out that cost, Evergy plans to file with the Missouri Public Service Commission to use the state’s newly created securitization policy and spread the cost to customers over 15 years. 

If approved, Evergy estimates those customers’ bills would increase by $2.85 per month. The company wouldn’t say how high those customer bills would be without securitization, but it said the impact would be greater.

“Securitization would be the lowest total cost and lowest bill impact option for customers,” said Gina Penzig, a spokeswoman for Evergy.

In general, Evergy is allowed to pass those costs onto ratepayers unless stakeholders, like the Office of the Public Counsel, successfully argue the company acted imprudently, which Mantle said is difficult to prove.

Meanwhile, Evergy customers in Kansas City will see a surplus returned to them. 

Kansas already granted Evergy authority to defer costs related to the storm. The company filed a plan with the Kansas Corporation Commission last week to recover them. 

In Kansas, Kansas City-area customers could see their bills decline by almost $10 per month from April 2022 until April 2023 to return a surplus of $43.9 million.

In Evergy’s other Kansas territory — stretching from the Nebraska border to Wichita and from the Missouri border west to Salina — customers will pay another $4.70 per month for the next two years to repay the $153.2 million in extraordinary costs from the storm. 

In both states, consumer and business advocates will have the opportunity to comment on Evergy’s plans.

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Allison Kite
Allison Kite

Allison Kite is a data reporter for The Missouri Independent and Kansas Reflector, with a focus on energy, the environment and agriculture. A graduate of the University of Kansas, she previously covered City Hall for The Kansas City Star, as well as state government in both Topeka and Jefferson City.