photo by: Mike Yoder/Journal-World File Photo

A flock of birds glides over a field east of Evergy's Lawrence Energy Center in this file photo.

Electric rates are going up next month in Lawrence, after state regulators and Evergy reached a deal on Tuesday.

That’s fitting because 2023 has been a year that knows how to push through a price increase. (The best way to save money at a grocery store in 2023 was to use the express lane. It gave the store less time to raise its prices.)

But maybe the year is getting more mellow as it winds down. Evergy’s residential customers in Lawrence and the surrounding area are expected to see about a $4.60 per month increase, on average, in their electric bills. That’s quite a bit less than the $15 per month increase that Evergy had proposed earlier in the year.

As we reported in October, though, the staff of the Kansas Corporation Commission, along with several business and consumer advocates, pushed back hard against that proposed rate increase. Eventually the KCC staff and Evergy, which is the largest electric utility in the state and in Lawrence, reached a compromise that came in about two-thirds less than what Evergy had originally proposed.

On Tuesday, the Kansas Corporation Commission itself — the actual utility regulator in the state — agreed to the deal and made it final. The result is that many of Evergy’s residential customers will receive about a 4% rate increase, but some customers actually will see their bills go down.

If you remember, Evergy is the utility company that was created when Topeka-based Westar merged with the parent company of Kansas City Power & Light five years ago. As such, Evergy operates with two separate utility rates in Kansas: one for its territory that used to be Westar and another for its territory that used to be KCP&L.

Lawrence is in the former Westar territory. Regulators approved rates that are expected to boost Evergy’s revenue by $74 million in the former Westar territory. That’s an increase of about 3.5% overall. Evergy had been proposing a 9.7% increase that would have increased revenue by about $204 million.

Then, there are our neighbors in Kansas City. The former KCP&L territory largely includes Lenexa, Overland Park and other communities on the Kansas side of the KC metro area. Residential customers in that former KCP&L territory are expected to see their monthly bills decrease by about $6 per month. That works out to about a 4.75% decline in electric rates. Evergy originally asked for about a 2% increase in rates, but regulators balked at that proposal.

As for why our neighbors are getting a rate decrease and we’re not, that gets into technical issues related to how much it costs Evergy to produce and distribute electricity in each territory. The KCC uses those costs to help determine how much profit Evergy should be allowed to make in each territory. Regulators this time around found the cost-to-profit equation to be out of line in the former KCP&L territory, thus the rate decrease.

The new rates will become effective on Dec. 21. It is the most significant increase in rates for Evergy since the merger five years ago. In a press release, Evergy said it has saved about $1 billion in operating costs in the first five years of the merger. As a result, the company said Kansas customers have seen much more moderate electricity costs than residents in many other states. Evergy says Kansas electric rates have increased by about 1% since 2017, while rates in neighboring states have increased by about 13% during the same period.

Consumers, though, will want to keep an eye on future rates. As part of the settlement agreement between Evergy and the KCC, regulators agreed to allow Evergy to seek another rate increase within the next 12 months. Those rate increases would be tied to costs Evergy is experiencing as it adds more infrastructure to serve the Panasonic electric vehicle battery plant in De Soto, and also costs related to the Wolf Creek nuclear power plant in Burlington, and investments the company makes in new renewable energy sources.

I have no idea what any of that could mean in terms of rate increases, but it is likely something to watch.

Evergy has said it needs the rate increases to continue to be profitable and make investments that improve the electric grid in ways that allow the company to “provide reliable, affordable, and sustainable service to our customers across the region.”