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Minutes for SB69 - Committee on Utilities

Short Title

Requiring the state corporation commission to study electric rates and consider certain factors in establishing just and reasonable electric rates.

Minutes Content for Wed, Feb 20, 2019

Chairman Masterson called the meeting to order.  This meeting is continued from February 19, 2019

PROPONENTS

Adam Beren, President, Berexco LLC.(Attachment 1)  Mr. Beren opened his testimony by giving his background, concern and perspective. He then covered rates and comparisons stating that Kansas experienced the 6th largest increase in rates in the country from 2005-2017 at 62%.  We are now the 18th most expensive state for electricity in the country.  We used to be the 15th cheapest.  He said the most important part is just assuming a $.02/kwh rate reduction could be achieved in Western Kansas, over $160mm annually could be reinjected back into the Kansas economy instead of going out of the state to the deb holders.

Erik Stafford, Kansas Chamber (Attachment 2)  Mr. Stafford said the Kansas Chamber holds a unique position of representing both ratepayers, and utilities.  We have been in constant communication with our utility members who have concerns with SB69 as introduced.  Businesses in our state have access to a variety of reliable energy sources.  However, rising energy costs are a newer issue to the state. 

Dennis George presented testimony on behalf of Associated Purchasing Services.(Attachment 3)  This bill is a reasonable and necessary path forward.  This bill looks at the reasons for our high-cost electricity service. But, more importantly, it will study potential solutions to the problem through an independent study.  Kansas hospitals and other healthcare businesses cannot afford to just wait and hope for utility costs to come down.  We need our policymakers to proactively seek solutions. 

David Nickel, CURB, stands in support of SB69.(Attachment 4) This bill answers the question of how would the state of Kansas go about determining whether Kansans should be satisfied with the current status of utility regulation in Kansas and if not, what changes can be made. 

Dorothy Barnett, Clean Energy Business Council stated that they have actively sought a comprehensive study for more than a year and are pleased to stand in support of SB69.(Attachment 5  We are particularly interested in finding out if there is an opportunity to lower electric rates with securitization; how money saved by refinancing utility assets that are no longer being fully utilized could be used to provide training for displaced workers or fund energy efficiency programs for low and moderate income populations.

Jim Zakoura, Kansas Industrial Consumers Group testified that for the past few years, KIC has been warning the KCC that the State's electricity rates have become uncompetitive with the surrounding region.(Attachment 6)  In these proceedings, KIC has simply asked utilities and the KCC to acknowledge the problem and come forward with a prospective plan to reduce rates over a reasonable period of time.  Unfortunately, they have not done so.  He summarized by saying that this bill is a necessary piece of legislation that will provide the Legislature the information it needs to address the issue of high electric rates.  KIC is ready to be part of the dialogue to find solutions to fix Kansas's energy problem.

Chairman Masterson asked the members if they had questions for any of the conferees.  Jim Zakoura answered questions.

Chairman Masterson closed the proponents

NEUTRAL

Zack Pistora, Kansas Sierra Club has taken a neutral position on this bill.(Attachment 7)  Mr. Pistora stated that the Kansas Sierra Club is concerned about the current ratemaking process and the high costs of electricity in Kansas, particularly for Kansas residential customers.  We feel the study's scope of interest, as provided in SB69, are appropriate for further consideration.  However, the Kansas Sierra Club is uncertain that the study proposed by this bill will lead us to the policy outcomes we need.

WRITTEN ONLY TESTIMONY

Steve W. Chriss on behalf of Walmart Inc.(Attachment 8)  Jeff Glendening, Americans for Prosperity(Attachment 9)   Rabbi Moti Rieber, Executive Director Kansas Interfaith Action(Attachment 10)  Tom Powell, Wichita Public Schools (Attachment 11)  Adam Pogue, Vice President, Manufacturing Services Spirit AeroSystems (Attachment 12)

Chairman Masterson closed the hearing on SB69.

Next meeting is February 21, 2019

Meeting adjourned 2:30pm