Report: Kansas electricity costs higher than other states
photo by: Thad Allender
WICHITA — Kansas customers are paying more for electricity than in neighboring states because of investments in coal and wind power, according to the state’s public utilities commission.
The Kansas Corporation Commission recently presented its analysis of the state’s high electricity rates to lawmakers, the Wichita Eagle reported.
The commission found that utilities Westar Energy and Kansas City Power & Light spent billions of dollars over the last decade on coal-fired power plants in Kansas. They also spent hundreds of millions of dollars on wind farms to comply with a now-repealed state rule for 20 percent of energy to come from renewable sources by 2020.
Kansas decided to invest in coal when it was cheaper than gas, but the price of natural gas has since dropped, said Justin Grady, the commission’s chief accountant.
Gas prices peaked in 2008 at roughly $12.70 per million British thermal units, and then dipped near $2 in 2017, according to the U.S. Energy Information Administration. The end of last year saw gas prices set near $4.
“In 2008 (to) 2011, it seemed like the best decision based on history,” Grady said.
Kansas’ electricity rates in 2008 were low compared to other private utilities in nearby states including Missouri, Oklahoma, Arkansas and Iowa. But Kansas customers were paying above average costs for power by the end of 2017.
Westar’s electricity cost rose to about 10 cents per kilowatt hour in 2017, an increase from less than 7 cents in 2008. Kansas City Power & Light saw its rates rise to almost 12 cents per kilowatt hour in 2017, up from 7 cents in 2008.
The commission found that the biggest driver of the rate hikes was capital investment in power plants.
Republican Sen. Julia Lynn said high electricity rates cause a downward spiral because they lead to lower sales, which creates higher rates. Lynn said she wants to look into how the state can encourage more industry.
The state Senate Utilities Committee plans to discuss the report next week.