Evergy Kansas Petition for Predetermination of Ratemaking Principles for Two Combined Cycle Gas Turbines and a Solar Array
Synapse provided expert testimony and analysis to support the Citizens’ Utility Ratepayer Board (CURB) in reviewing Evergy Kansas Central’s application for predetermination of the ratemaking principles that would apply to two combined cycle gas turbines (CCGTs) and a solar array that Evergy proposes to acquire. Our review focused on whether Evergy demonstrated: (1) that acquiring a 50 percent share in each of the two CCGT plants is prudent; (2) that the additions align with its most recent preferred plan and resource acquisition strategy; and (3) that its initial definitive cost estimates are reasonable.
We found that the capital costs of CCGTs have increased significantly since Evergy prepared its 2024 Integrated Resource Plan (IRP). As a result, the updated modeling Evergy submitted in this docket reflects reduced near-term CCGT buildout and greater reliance on battery storage, relative to the 2024 IRP. We also identified several concerns with the updated modeling, including its failure to account for the forward-looking risks to ratepayers from environmental regulations and fuel price volatility, its overstatement of the firm capacity accreditation and book life of new gas resources, and its omission of the full range of replacement resource options available to Evergy Kansas Central—such as battery storage at coal plant sites and/or additional coal-to-gas conversions.
We recommended that the Commission deny Evergy’s request for predetermination of ratemaking treatment for the two CCGTs. Instead, Evergy should be directed to focus its near-term procurement on “no-regrets” resource additions—primarily solar and battery storage. These resources are likely to be lower cost than the proposed CCGTs, reduce ratepayer exposure to future cost risks, and can be acquired incrementally. This approach would provide Evergy with greater flexibility to adapt to evolving market conditions and supply chain dynamics. Finally, Synapse offered recommendations for improving Evergy’s planning processes for prospective large-load customers to better protect current ratepayers from cost increases.