By Morgan Chilson, Kansas Reflector
TOPEKA — New Kansas businesses with demanding electricity requirements will be subject to additional costs and restrictions after the Kansas Corporation Commission approved a large-load tariff Thursday morning.
Evergy applied earlier this year to the state’s regulatory body to create a large-load tariff that would mitigate the effect of such users on other customers.
After numerous filings and negotiations among convenors, including environmental organizations, a data center association and school districts, the tariff affects new businesses using more than 75 megawatts of peak load energy per month.
Existing businesses that increase their pull on the system by 75 megawatts per month will also come under the tariff, said Brian Fedotin, the KCC staff member who summarized the bill for the three-member commission.
All convenors unanimously approved the tariff and on Thursday, it received unanimous approval from the KCC.
The final order sets multiple requirements for large-load users, including a minimum contract term of 12 years, plus an optional five-year period as the company ramps up, Fedotin said.
It also requires those customers to pay a minimum of 80% of their contract, even in months where they don’t use that much electricity, and to post collateral for two years of minimum bills.
In Evergy’s third-quarter earnings call Thursday morning, CEO and president David Campbell said the company projects 2% to 3% load growth by 2029 with current customers, including big customers like Panasonic. That projection may increase to 4% to 5% load growth if negotiations for two data center projects come to fruition, he said.
In addition, Campbell said, there’s an additional data center project in the works and multiple customers that would represent about 2 to 3 additional gigawatts of peak demand. They were not included in the 4% to 5% forecast, he said, so demand could increase.
“Overall, we continue to see an incredible level of interest in our service territory,” Campbell said on the call. “We’re making progress with potential new large customers across all phases of discussion. Each category reflects potential new entrants that will empower growth, investment and drive prosperity for our region.”
Evergy spokeswoman Gina Penzig said any new business coming on line with projections of 75 megawatts of load would be subject to the tariff, but there could be exceptions.
“These tariffs will apply to any new load expected to be 75MW or greater unless certain state incentives are offered to new prospective customers, which in that case could lead to a special contract,” she said.
In September, Evergy executive vice president of utility operations Chuck Caisley called Kansas’ design of its large-load tariff “a model” for other states because it seeks to distribute costs without affecting small businesses and residential customers.
The Sierra Club was represented in the docket by Great Rivers Environmental Law Centerand signed the unanimous agreement, although the organization still has concerns.
Sarah Rubenstein, a Great Rivers staff attorney, said without the tariff and clear protections, families and small businesses could foot the bill for data centers and other large load users.
“This settlement ensures that large energy users share responsibility for the infrastructure they require while also creating new opportunities to move the grid toward clean, renewable energy,” she said.
Sierra Club supported changes in Evergy’s original tariff proposal during the negotiations, such as decreasing the threshold from 100 megawatts to 75 megawatts and allowing large-load customers to shape climate goals through Evergy’s integrated resource plan, the organization said in a news release.
Sierra Club’s statement said it is concerned because Evergy is delaying coal plant retirements and building natural gas plants to meet energy demands.
“Evergy is going in the wrong direction by delaying coal plant retirements that are increasingly expensive and less reliable, but we joined this agreement alongside tech companies and the utility because it places reasonable protections on existing customers while enabling new investments in clean energy,” said Ty Gorman, Sierra Club’s Beyond Coal Campaign senior organizing strategist.
