SESSION OF 2023
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2225
As Recommended by House Committee on
Energy, Utilities and Telecommunications
Brief*
HB 2225 would amend law authorizing a Kansas
Corporation Commission (KCC)-regulated utility to cover
costs associated with the transmission of electric power
through a transmission delivery charge (TDC).
[Note: The bill would only apply to electrical utility
companies that are under KCC jurisdiction.]
Approval Requirements
The bill would state that for-profit, investor-owned
electric utilities serving more than 20,000 customers in the
state may only recover transmission-related costs through
TDCs when the transmission facility is constructed as a result
of a notice or directive to construct from a regional
transmission organization (RTO) or independent system
operator that is regulated by the Federal Energy Regulatory
Commission (FERC) or its successor agency.
[Note: Kansas is a member of the Southwest Power
Pool (SPP), which is an RTO.]
Internal or Local Planning Processes
The bill would state that for-profit, investor-owned
electric utilities could not recover costs through a TDC when
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org those costs are associated with construction performed as a
result of the utility’s internal or local planning processes
without the notice or directive from a FERC-regulated entity,
as stated above.
The bill would require, on July 1, 2023, that if a utility is
recovering transmission-related costs associated with the
utility’s internal or local planning processes, the utility must
file a revision to the utility’s TDC with the KCC within 90 days
to no longer include such costs. The KCC would have within
240 days of receipt of the utility’s request for revision to
remove the costs from the TDC and include such costs as a
component of such utility’s rate base.
Background
The bill was introduced by the House Committee on
Energy, Utilities and Telecommunications at the request of a
representative of the KCC.
House Committee on Energy, Utilities and
Telecommunications
Proponent Testimony
In the House Committee hearing on February 14, 2023,
representatives of Americans for Prosperity-Kansas, Kansas
Chamber, KCC, and Kansans for Lower Electric Rates
testified as proponents, stating the bill would allow the KCC
more control and oversight of development in Kansas, which
would help protect ratepayers and improve regional rate
competitiveness.
Written-only proponent testimony was provided by a
representative of the Kansas Agribusiness Retailers
Association, Kansas Grain and Feed Association, and Renew
Kansas Biofuels Association.
2- 2225 Neutral Testimony
Written-only neutral testimony was provided by a
representative of the Citizens’ Utility Ratepayer Board
(CURB).
Opponent Testimony
Opponent testimony was provided by a representative
of Evergy, stating the bill is regressive regulatory policy in its
current form. Repealing the TDC would prevent Evergy from
immediately passing on any savings or decreases from the
charge until the next rate case and would cause an increase
in rate cases that would negatively impact customers.
No other testimony was provided.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, CURB indicates that enactment of the
bill would result in $40,000 of additional expenditures from
the agency fee fund in FY 2023 and all subsequent fiscal
years. The expenditures would be made to retain expert
consultants to evaluate the recoverability of transmission-
related costs and analyze the impact of such costs on
consumers’ utility rates. This estimate assumes that the
additional consulting fees would total $60,000 per rate case
and that the agency would intervene in one rate case every
18 months, on average.
According to the Kansas Corporation Commission,
enactment of the bill would not have a fiscal effect on agency
operations.
Any fiscal effect associated with enactment of the bill is
not reflected in The FY 2024 Governor’s Budget Report.
3- 2225 Transmission delivery charge; Kansas Corporation Commission; investor-owned
electric utility; Federal Energy Regulatory Commission; regional transmission
organization; Southwest Power Pool; cost of recovery of transmission-related costs;
transmission facilities
4- 2225