Kansas regulators have given Evergy the go-ahead to raise the utility’s rates to help finance construction of two new natural gas-fired power plants, along with a utility-scale solar power project, in the state.

The Kansas Corporation Commission (KCC), which oversees the state’s public utililties, on July 7 approved two settlement agreements that allow Evergy Kansas Central (EKC) to recover the cost of the three new generation facilities via an 8.6% rate increase for customers. The utility’s filings with the KCC have said the new power stations will help serve increasing demand for electricity, and improve power delivery reliability.

Evergy filed an application with the KCC in November of last year, requesting a ruling about how the cost of the new plants could be recovered from customers. Evergy serves 1.6 million customers in Kansas and Missouri.

Evergy has proposed building two 710-MW combined-cycle gas turbine (CCGT) facilities. The Viola plant will be located near Evergy’s Viola Substation in Sumner County, with a target commercial operation date of Jan. 1, 2029. The McNew plant will be built in Reno County and is expected to operate by January 1, 2030. Evergy Kansas Central and Evergy Missouri West will each have 50% ownership in the gas plants. Filings show estimated construction costs of $788.75 million for the Viola station, and $800.52 million for the McNew plant.

The Missouri Public Service Commission still must approve Evergy Missouri West’s participation in construction of the gas-fired power plants. That group, according to its filings, has previously recommended against pre-construction approval, saying that costs in the proposal for the new plants were not certain.

New Solar Farm

The proposed solar power facility, known as Kansas Sky, would be located in Douglas County and fully owned by EKC. Construction of the solar farm has an estimated cost of $228.1 million. The KCC said support for the solar farm “was supported by substantial, competent evidence, will result in just and reasonable rates, and is in the public interest. In making this finding, the Commission found the arguments regarding resource diversification compelling. To date, very little utility-scale solar generation has been successfully developed in Kansas, and the profile and attributes of solar energy, if developed, will be complimentary to existing generation in the region, including wind generation.”

Kansas Gov. Laura Kelly (D) earlier had said the plants would create 500 jobs during construction, along with 165 permanent jobs once operational. She said the facilities would ensure reliable energy during periods of high demand or emergency situations, and would support the supply of electricity on hot summer days. Kelly last year had said of the new plants: “As Kansas continues to transition to more sustainable energy, we’re doing it responsibly. These plants are much cleaner than traditional coal plants.”

David Campbell, Evergy’s CEO and chairman, at a news conference in October of last year at which he announced the utility’s plan to build new generation, said the plants would “help maintain a diverse energy mix for our state,” ensuring “reliable, affordable, sustainable energy. They’re flexible resources that can ramp production up and ramp production down based on the needs of the grid, so they pair very well with Kansas’ abundant renewable generation resources.”

Evergy spokeswoman Gina Penzig in a statement said the company welcomes regulatory approval of the new plants that will help ensure system reliability. “Kansas and Missouri are experiencing record economic growth, and today’s predetermination order affirms that the plants are needed to serve customers and are an efficient way to meet the growing demand.”

Evergy in a long-range resource plan filed in 2022 said the utility had planned to add only solar and wind power generation in the ensuing decade, but changed those plans the following year. The utility in 2023 said it would add natural gas-fired generation, and also delayed the retirement of its Lawrence Energy Center coal-fired plant. An updated plan filed earlier this year reiterated the utility’s strategy to add more natural gas-fired power plants, along with additional wind and solar power.

Delayed Retirements for Coal-Fired Plants

Each of Evergy’s three subsidiaries that filed Integrated Resource Plan updates earlier this year delayed the retirement of coal-fired facilities across the state that combined have 914 MW of generation capacity.

Kansas commissioners on Monday, during a virtual hearing about the proposed plants, said they are concerned about Evergy’s rate hikes, despite their approval of the utility’s construction plan.

“The commission is concerned and troubled by the frequency and magnitude of rate cases, and strongly encourages Evergy to focus on pacing its proposed investments to better align those investments with actual load growth and the mitigation of large rate increases,” said Commissioner Dwight Keen.

Keen noted the commission’s approval is tied to the need for more power generation in the state to serve residents, and to ensure stability of the power grid. The concern about continued rate increases at least in part stems from a separate rate case involving Evergy, which has asked the KCC for as much as a 15% hike to residential power rates. That increase would be on top of the 8.6% hike to fund the new gas and solar facilities.

Commissioners approved a $41 million rate hike for Evergy customers in 2023.

“The commission understands that from time to time, new investment in electric capacity is needed to support reliability and economic development in Kansas,” Keen said. “However, affordability and genuine maximum capacity needs must be major priorities and proactively pursued as Evergy addresses a seemingly endless list of ostensibly justifiable projects and initiatives.”

Jim Zakoura, president of the Kansas Industrial Consumers Group, in a statement said Evergy has enough generation to meet electricity demand if it continues to operate its current power plants, including its coal-fired facilities. “Evergy’s plans to retire coal facilities early, while those facilities continue to provide electric service at costs which are far lower than new gas-fired generation, is not related to increased electric demand,” Zakoura said in a statement. “It is simply trading low-cost generation for high-cost generation to serve the same level of demand. Retail ratepayers get no greater value for their money—only higher prices.”

—Darrell Proctor is a senior editor for POWER.