photo by: Kansas Reflector screen capture from KCC video

Jim Zakoura, an Overland Park attorney who represents many retail customers in Kansas Corporation Commission hearings, spoke against Energy’s plan to build two natural gas plants in Kansas.

TOPEKA — Stark disagreements on the future of Evergy’s proposal to build two new natural gas plants in Kansas surfaced Monday during opening statements at the beginning of three days of Kansas Corporation Commission hearings.

Evergy announced last fall it would build two natural gas plants in Kansas, in Reno and Sumner counties, citing economic growth in the state that will increase demand. In March, the company announced plans to build a third plant in Missouri. Evergy also is planning a new solar installation in Douglas County.

KCC regulates utilities in Kansas, and the three-person board will determine whether Evergy can move forward with its plans.

Significant opposition to the proposed Kansas natural gas plants is coming from retail customers, who believe the new plants will raise rates and are not necessary to ensure adequate electricity supply. Those organizations are on the docket to speak and filed testimony ahead of time.

In opening remarks, Jim Zakoura, an Overland Park attorney representing multiple industrial and retail businesses, said 99% of retailers who have spoken out are against building the two plants.

“There’s almost no testimony by Evergy in this docket regarding the retail impact on constructing two natural gas facilities, the cost of about $2 billion on 735,000 retail ratepayers in the state of Kansas,” Zakoura said. “Essentially, 99.9% of the retail ratepayers do not support the agreement. Retail ratepayers don’t want the commission to gamble with their hard-earned money.”

Alissa Greenwald, an attorney representing New Energy Economics, expressed concerns that Evergy has understated the risk to customers based on the natural gas fuel price forecast and that viable alternatives, such as investing in battery storage, could help meet capacity needs at a lower cost to customers.

Evergy officials and KCC staff were the two primary entities standing as proponents of the plants.

Evergy attorney Will Wohlford disagreed that both plants weren’t needed and spoke at length about the research and work that goes into the integrated resource planning that Evergy undertakes. Utility companies use IRPs to forecast utility needs and growth in the communities they serve. He explained this docket specifically addresses predetermination of rates for Evergy Kansas Central, one of Evergy’s divisions that would have 100% ownership of the planned solar installation, and 50% of each new natural gas plant.

He also pointed to legislation last year that passed almost unanimously through the Kansas House and Senate that he said supports what Evergy is trying to accomplish.

“This is a resounding public policy pronouncement by the Kansas Legislature in favor of additions of gas facilities for reliability and the use of pre-determination procedures to establish rate treatment for those additions,” he said, referring to House Bill 2527.

Wohlford made a case for the need of the proposed improvements to the Evergy system.

“We know in the last three to four years, we have started to get tight during various weather events, not just Evergy but (the Southwest Power Pool),” Wohlford said. “I would prefer and I think Evergy would prefer to utilize the results of our integrated resource plans and the work that we’ve done and staff have also done an assessment of. This is not the end game. If you look at our IRP, it calls for more resources that we need to consider in 2031 and beyond.”

Some opponents said investing in these plants locks ratepayers into unknown costs and risks, said Carly Masenthin, the lead legal staff for KCC. The regulator’s staff see things differently.

“We’ve made it through our more severe weather periods so far thanks to the efforts made by this commission, our Kansas utilities, the energy industry as a whole in this state, and by importing electricity from our neighboring regions,” she said. “But I think the downside of that success is that it enables taking for granted the fact that the air conditioner and the heat stays on, and perhaps it masks the reality that our success has come by the skin of our teeth for the last four to five years.”

“Even though these plants won’t be online this year or next, staff will sleep easier knowing that Kansans can look forward to additional dispatchable, reliable generation coming on in the near future,” Masenthin added. “Staff urges the commission to find that these plants are needed, that the cost to build them is reasonable and will be well managed, a cost which, again, staff believes will only increase if they are delayed.”

In its long-range plan filed with regulators in 2022, Evergy planned to exclusively add wind and solar facilities over the coming decade. A year later, it scaled back those planned renewable energy facilities, forecasted plans to add natural gas plants and delayed the retirement of the Lawrence coal plant.

Once the plants are online, expected to be in 2029 and 2030, the plants will each add 705 megawatts of power to Evergy’s generation capabilities.

KCC commissioners began hearing testimony in the afternoon, much of which was behind closed doors because of confidential business information being shared by Evergy.

Wohlford was the first person called to testify, and he said he was surprised that opponents were saying the costs of building the plants weren’t included in the information.

“I would suggest that our definitive cost estimate here has the same level of engineering and cost rigor to it than any other predetermination that we brought forward. There certainly are some things we haven’t done yet, because you don’t procure everything and cost everything before the commission weighs in on predetermination,” he said.

Wohlford said costs and information will be consistently updated throughout the projects.

“I think we’re a long way from saying the costs of these projects are unknown,” he said.

Jason Humphrey, Evergy vice president of development, testified before the hearing at the end of the day, discussing the adaptations Evergy made to account for tariffs and other costs that may have increased. It is estimated each plant will cost about $1 billion. Humphrey was asked about the affect of tariffs and the current economy on cost estimates previously submitted.

“Our definitive cost estimates were filed for really an appropriate contingency for this point in the project,” he said. “We do understand the specter of uncertainty that is out there. If we do anticipate costs going over 115% of the definitive cost estimates. At that time, we would have the ability to pause and reevaluate. Our definitive cost estimates today stand, but we wanted a mechanism in place and settlement that if we do see costs rising that we would have the ability to come and talk to parties and the commission about that.”