TOPEKA – This afternoon, the Kansas Corporation Commission (KCC) approved two settlement agreements which allow Evergy Kansas Central (EKC) to recover the cost of three new generation facilities intended to meet increasing electric demand and improve reliability. Last fall, the utility announced plans to build two gas plants and a solar facility. Evergy filed an application with the Commission in November, requesting a determination of how costs incurred will be recovered from customers.
The application generated a great deal of interest. In addition to Evergy and Commission Staff, 31 parties sought and were granted the right to intervene and formally participate in the proceedings. As a result of their work, the Commission was presented with two settlement agreements for consideration: a unanimous settlement agreement regarding the solar facility, and a non-unanimous settlement agreement on the gas plants.
Evergy is proposing the new solar facility (Kansas Sky) to be located in Douglas County and owned 100% by Evergy Kansas Central. The estimated cost of construction is $228.1 million. After careful review, the Commission found the unanimous settlement agreement related to Kansas Sky was supported by substantial, competent evidence, will result in just and reasonable rates, and is in the public interest. In making this finding, the Commission found the arguments regarding resource diversification compelling. To date, very little utility-scale solar generation has been successfully developed in Kansas, and the profile and attributes of solar energy, if developed, will be complimentary to existing generation in the region, including wind generation.
Evergy’s gas plant proposal calls for two 710 MW combined cycle gas turbine (CCGT) plants. The Viola plant will be located near Evergy’s Viola Substation in Sumner County and is expected to operate by January 1, 2029. The McNew plant will be built in Reno County and is expected to operate by January 1, 2030. Evergy Kansas Central and Evergy Missouri West will each have 50% ownership in the gas plants. The cost of construction to Evergy Kansas Central is estimated at $788.75 million for the Viola plant and $800.52 million for the McNew plant.
The Commission finds approving the CCGT Settlement is in the public interest. The Commission believes the CCGT Settlement is an efficient and reliable plan to add generation capacity to Evergy’s fleet. Furthermore, the Commission believes the CCGT Settlement contains sufficient safeguards and guardrails to protect customers in the event of cost overruns.
The CCGT settlement will not immediately impact rates. Other than the Construction Work in Progress (CWIP) rider recently authorized by the Legislature, which Evergy can begin utilizing 365 days after construction begins on each plant, no other costs will be added to rates until Evergy files a subsequent rate case.
The frequency of rate cases is also addressed by the Commission in today’s order.
“The Commission is troubled by the frequency and magnitude of rate cases and strongly encourages Evergy to focus on pacing investment to better align with load growth and mitigate large rate increases. The Commission understands new investment is needed to support reliability and economic development in Kansas. However, affordability must be a major priority and proactively pursued as Evergy addresses a seemingly endless list of “justifiable” projects and initiatives. To meet future capacity needs, for example, the Commission will expect Evergy to demonstrate its serious consideration of less capital-intensive options like demand response, utilization of surplus interconnection sites and grid-enhancing technologies.”
Today’s order is available here.
The Kansas Sky unanimous settlement agreement is available here.
The CCGT non-unanimous settlement agreement is available here.
A recording of today’s Business Meeting featuring comments by Commissioners, is available on the KCC YouTube channel.
