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June 23, 2024
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Minutes for HB2225 - Committee on Energy, Utilities and Telecommunications

Short Title

Limiting cost recovery for certain electric public utilities' transmission-related costs.

Minutes Content for Tue, Feb 14, 2023

Chairperson Delperdang opened the hearing on HB2225.

Jessie Pringle provided an overview of the bill.(Attachment1) Ms. Pringle responded to questions from committee members.

Chair recognized proponents for in person testimony as follows:

Justin Grady, Kansas Corporation Commission (Attachment2) testified in support of the bill. Mr. Grady said the Kansas Corporation Commission (KCC) seek to level the playing field between local transmission, distribution and generation investments, regulating them all under more traditional rate making practices before the KCC. Currently, he said  the transmission delivery charge statue allows the Evergy Kansas Central  and Evergy Kansas Metro's to received incentive rate making treatment, bypassing meaningful KCC regulatory review, for approximately 40% of annual capital expenditures.

Eric Stafford, Kansas Chamber (Attachment3) testified in support of the bill. He said he was trying to think of a clever Valentine for energy rates but couldn't come up with one.  He believes the bill would prevent transmission-related costs constructed from utilities, internal or local planning processes, from being included as a transmission delivery charge passed on to ratepayers, without review and approval from the KCC. 

Paul Snider, Kansans for Lower Electric Rates (Attachment4) testified in support of the bill.  Mr. Snider said transmission is a key cost driver of high electric rates in Kansas and a significant part of Evergy's spending plan that include very sizable investments in transmission. He said the key to the capital spending is the transmission delivery charge and in 2003 legislature provided then Westar Energy with this surcharge opportunity, whats followed is yearly increases.

Elizabeth Patton, Americans For Prosperity-Kansas (Attachment5) testified in support of the bill. She said our state has some of the cheapest gasoline prices in the country, yet we rank #34 in terms of electricity prices. She believes this bill would bring overdue scrutiny to utility costs, discipline to discretionary transmission investments, and close our state's performance gap between electricity and transportation fuel. She said transmission delivery charges (TDC) represent a significant part of Kansans' utility bills and TDC are not reviewed by the KCC under the current law.

The conferees responded to questions from committee members.

Proponents - Written Only testimony as follows:

Randy Stookey, Kansas Grain and Feed Association, Kansas Agribusiness Retailers Association and Renew Kansas Biofuels Association (Attachment6)

Chair recognized neutral for Written Only testimony as follows:

David Nickel, CURB (Attachment7)

Chair recognized opponent in person testimony as follows:

Chuck Caisley, Evergy (Attachment8) testified as an opponent of the bill. Mr. Caisley said Evergy opposes the bill as it is currently drafted and believes it goes to far and is regressive regulatory policy.  He said Evergy hopes to work with others to achieve a more transparent and efficient adjustment clause while reserving the ability to unlock benefits intended by the transmission delivery charge (TDC). He said TDC was adopted to address concerns in Kansas about the lack of new investment in transmission as well as reliability of the transmission system. Those investments have benefited Kansas by enabling the development of a major multi-billion dollar industry in wind generation and invest in aging Kansas electric grid, some of which has been in place and serving Kansans since World War II. Mr. Caisley said customers throughout Kansas has benefited from not only better reliability, but investments that have made it possible for large businesses, universities and residential customers to benefit from Kansas wind. A reliable transmission system can unlock long term fuel price stability and helped attract new economic development projects in Kansas.

The conferees responded to questions from the committee members.

Chairperson Delperdang closed the hearing on HB2225.