Electric rate increases likely to be much less than originally proposed by Evergy; eastern Lawrence apartment project drawing opposition

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.

News and notes on a couple of battles — one that has long been underway and another that is brewing.

• First, the ongoing one. Evergy, the dominant electric utility in Lawrence and the state, has been trying to get a major rate increase for many of its customers. The company also has been getting a lot of pushback.

But in recent weeks, a proposed settlement agreement between Evergy and Kansas utility regulators has emerged that would still result in a rate increase for Lawrence residents but a much smaller one than originally proposed.

The bottom line for an average electric customer in Lawrence is that the new rates would result in a monthly increase of $4.64, on average, according to state regulators. That’s far different from the nearly $15 per month the previously proposed rates would add to the bill of an average customer.

Evergy had been seeking a 9.77% rate increase for customers who reside in Lawrence and many other parts of Evergy’s Kansas territory. Now, Evergy leaders say they are willing to settle for a 1.95% rate increase. The staff of the Kansas Corporation Commission, the state agency that regulates public utilities, has said that proposed rate increase is reasonable. The Citizens Utility Ratepayer Board, a state entity charged with protecting the interests of utility customers, has said it also can live with that increase.

Now, the agreement needs final approval from the Kansas Corporation Commission itself. The state-appointed board will rule on the settlement agreement no later than Dec. 21. The settlement agreement came forward in late September, but a spokeswoman with the KCC told me this week that the agreement is still on track to be acted upon in the coming weeks.

I’m no KCC expert, but the proposed settlement has the makings of a deal that regulators are likely to approve. For one thing, Evergy is agreeing to a lot less revenue than it originally hoped to raise through the rate increase. When Evergy was seeking a nearly 10% rate increase, the company projected it would receive a net revenue increase of $204 million a year. Under the newly proposed 1.95% increase, Evergy would receive a net revenue increase of about $14 million.

That’s a big difference, and it tells only part of the story. Evergy operates two electric utility divisions: one that used to be served by Topeka-based Westar Energy and another that used to be served by Kansas City Power & Light. Evergy, if you recall, was formed when those utilities merged. Lawrence is in the former Westar territory, while much of the Kansas side of the Kansas City metro is in the former KCP&L territory. Evergy was proposing a rate increase of about 2% for those KC area customers. The KCC staff, though, balked at that idea in a big way. The proposed settlement agreement calls for a 4.53% decrease in rates for the former KCP&L territory. Evergy is expected to see its net revenue decrease by nearly $33 million as a result.

I’m no Evergy expert, but presumably the utility’s leaders are reading some tea leaves that suggest the KCC was not going to approve its rate increase or anything close to it. Evergy, in a multitude of filings, made several arguments why the rate increase was justified, including that the company is spending a lot of money to make the electric grid more reliable and more efficient. Kansas hasn’t suffered some of the reliability problems that other states have experienced. Evergy’s strongest argument, perhaps, was that the rate increase would be the first since Evergy was formed following the 2018 merger of Westar and KCP&L. Evergy has shared with customers about $150 million in savings that resulted from the merger over the last five years.

But a key detail in the original rate proposal was that Evergy was seeking to earn a 10.25% return on equity, which is basically equivalent to a return on investment. That would be up from the 9.3% return on equity that regulators currently have authorized for the utility. A lot of these rate cases come down to how much money regulators think a utility should be allowed to make. I don’t know what Evergy’s future authorized rate of return would be under the settlement. (And I would need to add an extra hamster and wheel to the power plant that runs my calculator to even attempt to calculate it.) As I read the settlement agreement, that seems to be an issue that will be taken up at a later time, meaning this proposed rate increase is on the verge of a settlement but the issue of electric rates is far from being settled for the long term.

• Next, news of a brewing battle of a different nature. There’s no lack of energy in the Brook Creek Neighborhood regarding a proposed apartment complex along East 15th Street. Neighbors have launched a campaign to oppose the project.

We reported late last month that a Manhattan-based development group filed for a rezoning request that would open the door for 500 units of new apartments to be constructed on 17 acres of heavily wooded property along East 15th Street, next to Lawrence VenturePark and southeast of Lawrence’s Oak Hill Cemetery.

As that rezoning request is scheduled to be heard by the Lawrence-Douglas County Planning Commission next week, multiple neighbors are campaigning against the rezoning of the property at 2111 E. 15th St. Brook Creek Neighborhood Association member Sharon Davis said via a press release that the project would “cram an island of density into our neighborhood and change the character of it forever.” Michael Almon, vice president of the neighborhood association, called the extent of change the proposed apartments would create “obscene.”

The city’s professional planning staff, however, is recommending approval of the rezoning, with some conditions, such as preserving as many trees as possible around the edge of the property.

The project seems headed for a familiar clash at Lawrence City Hall. City officials have long talked about the need for denser development in order to control costly issues, such as urban sprawl. However, when dense developments get proposed, especially for vacant land, they often face opposition from neighbors.

The added twist to this project is that it comes as the region is preparing for the early 2025 opening of the Panasonic battery plant in De Soto, which is expected to produce 4,000 direct jobs and another 4,000 ancillary jobs. This site’s eastern location makes it one of the closest in Lawrence to the Panasonic site, which is just a short eastern drive down Kansas Highway 10. Certain segments of the community have been criticizing the city for not doing more to create housing in preparation for the Panasonic project.

What’s not in debate is that the apartment project would be large. The proposed developer, The Prime Company, originally submitted a concept plan that called for building 528 apartments with 1,056 bedrooms, in two phases. Now, it appears the company has submitted a revised concept plan that calls for 360 apartments, with a total of 720 bedrooms, to be built in two phases. The new concept plan also talks about officially designating the apartments as affordable housing, which currently means they would house households with incomes of $75,000 or less. However, the city does note that the concept plans are fluid and could change. The city is only being asked to approve a new zoning category. The project hasn’t yet filed an official development plan for consideration.

That said, here is an interesting graphic produced by the city that shows the concept plan superimposed on the proposed site, with existing neighborhoods bordering the property shown.

The Planning Commission will meet at 6:30 p.m. Wednesday to consider the rezoning request, which ultimately would need approval from the City Commission before becoming final.


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