Energy Study Proposes Ways to Reduce Costs for All Customers

The Kansas Chamber on Monday released its energy study, State of Electricity in Kansas.

Chamber President and CEO Alan Cobb said the state's high energy costs impact all customers, hurt the state’s economic growth and discourage investment and expansion.

"High energy costs, especially high electric rates, have been a top concern for Kansas businesses for a number of years," Cobb said. "By looking into what drives those costs, we hope to provide the Kansas Legislature with a list of actionable items that leads to a comprehensive energy policy. One that balances a diverse portfolio of energy sources and technologies with regionally competitive electric rates and delivery costs that ensures uninterruptible service, regardless of their source."

Federal Energy Regulatory Commission (FERC) former Chairman Neil Chatterjee and his team at Hogan Lovells conducted the study last summer. It was presented today to Chamber members during a virtual event.

The report looks at the scope of regulatory and market factors driving the high retail electric rates in Kansas as well as evaluates and provides suggestions for potential mitigation strategies to address those rates.

The energy study includes six legislative and regulatory reforms proposals the state could take to reduce energy costs for all customers:

• Study the costs and benefits of retail competition in the electric sector.
• Require the Kansas Corporation Commission (KCC) to implement pilot programs for distributed generation and demand response.
• Adopt an Integrated Resource Plan (IRP) requirement for all utilities.
• Study the costs and benefits of continuing the state's participation in the Southwest Power Pool (SPP).
• Expand and/or directly elect KCC commissioners.
• Increase KCC funding and staffing to reduce incentives to settle every rate case.

These actions could be pursued at the KCC but it is likely that legislative fixes will be faster and more effective.

The report also recommends those interested in reducing their electricity costs should consider becoming more involved in the SPP stakeholder process and in FERC proceedings involving the SPP since those two agencies determine whether transmission expansion is necessary.