HOUSE BILL No. 2527
AN ACT concerning public utilities; relating to the state corporation commission;
authorizing public utilities to defer to a regulatory asset and recover depreciation
expenses relating to certain rate base additions; establishing a cap on such cost
recovery and limiting the time that such cost recovery may be implemented by a
public utility; authorizing new economic development electric rates for large
facilities; limiting the time that such economic development rates for large facilities
may be implemented by a public utility; prohibiting any revenue lost through the
implementation of economic development rates from being imputed into the electric
public utility's revenue requirement; prohibiting the commission from authorizing the
retirement of nuclear powered and fossil fuel-fired electric generating units unless
certain requirements are met; authorizing electric public utilities to retain certain
electric generating facilities in the utility's rate base; requiring the commission to
report annually on public utility requests to retire electric generating units;
authorizing a rate adjustment mechanism for the construction of new gas-fired
electric generating facilities; limiting the time that such rate adjustment mechanism
may be implemented by a public utility; extending the timeline for the commission to
make a determination of ratemaking principles and treatment prior to a public utility
constructing or acquiring a stake in an electric generation or transmission facility;
establishing procedural requirements to support the timely completion of such
proceedings; revising the net metering and easy connection act; increasing the public
utility system-wide capacity limit for facilities subject to net metering; requiring net
metering facilities to be appropriately sized based on the customer's expected load;
establishing requirements for exporting power from a net metering facility to a
utility; amending K.S.A. 66-1264, 66-1265, 66-1266 and 66-1267 and K.S.A. 2023
Supp. 66-101j and 66-1239 and repealing the existing sections.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) As used in this section:
(1) "Commission" means the state corporation commission.
(2) "Public utility" means the same as defined in K.S.A. 66-104,
and amendments thereto.
(3) "Qualifying electric plant" means all rate base additions by an
electric public utility. "Qualifying electric plant" does not include
transmission facilities or new electric generating units.
(4) "Rate base cutoff date" means the date rate base additions are
accounted for in a general rate proceeding. In the absence of a
commission order that specifies the rate base cutoff date, "rate base
cutoff date" means the date as reflected in any jointly proposed
procedural schedule submitted by the parties in the applicable general
rate proceeding, or the date that is otherwise agreed to by such parties.
(5) "Weighted average cost of capital" means the return on rate
base used to determine the revenue requirement or that was approved to
be used for regulatory accounting purposes in the public utility's most
recently ordered return on rate base in a general rate proceeding.
(b) Notwithstanding any other provision of law except K.S.A. 66-
1239(b)(5), and amendments thereto, commencing on July 1, 2024, a
public utility shall defer to a regulatory asset 90% of all depreciation
expense and return associated with all qualifying electric plants
recorded to plant-in-service on the utility's books if the public utility
has provided notice to the commission of the public utility's election to
make such deferrals pursuant to subsection (f)(1). Such deferral shall
begin on July 1, 2024, if the public utility has notified the commission
of the public utility's election to make such deferral by such date or
shall begin on the date that such election is made if such election is
made after July 1, 2024. Except as provided in subsection (c),
subsection (f)(2) and the provisions of section 2, and amendments
thereto, in each general rate proceeding concluded after August 28,
2018, the balance of the regulatory asset as of the rate base cutoff date
shall be included in the public utility's rate base without any offset,
reduction or adjustment based upon consideration of any other factor
with the regulatory asset balance arising from deferrals associated with
qualifying electric plants placed in service after the rate base cutoff date
to be included in rate base in the next general rate proceeding.
(c) The regulatory asset balances arising under this section shall HOUSE BILL No. 2527—page 2
be adjusted to reflect any prudence disallowances ordered by the
commission. This section shall not be construed to affect existing law
with respect to the burdens of production and persuasion in general rate
proceedings for rate base additions.
(d) Parts of regulatory asset balances created under this section
that are not included in rate base shall include carrying costs at the
public utility's weighted average cost of capital, plus applicable federal,
state and local income or excise taxes. Regulatory asset balances
arising under this section that are included in rate base shall be
recovered in rates through a 20-year amortization beginning on the date
new rates reflecting such amortization take effect.
(e) (1) Depreciation expense deferred under this section shall
account for any qualifying electric plant placed into service less
retirements of the plant replaced by such qualifying electric plant.
(2) Return deferred under this section shall be determined using
the weighted average cost of capital applied to the change in plant-
related rate base caused by the qualifying electric plant, plus applicable
federal, state and local income or excise taxes. In determining the
return deferred, the public utility shall account for changes in all plant-
related accumulated deferred income taxes and changes in accumulated
depreciation, excluding retirements.
(f) (1) This section shall only apply to any public utility that has
elected to make the deferrals for which this section provides and filed a
notice with the commission of such election.
(2) A public utility that makes such election shall be authorized to
make the deferrals authorized by this section until December 31, 2030,
except that, upon application by such public utility, the commission
may authorize the public utility to continue to make the deferrals
authorized by this section until December 31, 2036. Any such
application shall be filed with the commission on or before December
31, 2028. The commission shall issue a determination on an application
filed pursuant to this subsection within 240 days of the date that such
application is filed. If requested by the public utility, an intervenor in
the application docket or commission staff, the commission shall hold a
hearing on such application. When making a determination upon such
application, the commission may consider factors that the commission
deems just and reasonable and condition the commission's
determination on any factors that are relevant to the deferrals
authorized pursuant to this section. If the commission denies the public
utility's application, such denial shall only act to prohibit the public
utility from making such deferrals after December 31, 2030, and shall
not otherwise affect or terminate any deferral that is authorized to be
made pursuant to this section or any regulatory or ratemaking treatment
of the regulatory assets arising from such deferrals.
(g) The provisions of this section shall not be construed to restrict
or limit the authority of the commission to authorize a public utility to
use deferral accounting treatment for any rate base addition, such as a
new electric generating unit, that is not considered a qualifying electric
plant pursuant to this section.
New Sec. 2. (a) As used in this section:
(1) "Commission" means the state corporation commission.
(2) "Public utility" means the same as defined in K.S.A. 66-104,
and amendments thereto.
(3) "Qualifying regulatory asset" means any regulatory asset
balance arising pursuant to section 1, and amendments thereto, from the
rate base cutoff date in the public utility's prior general rate proceeding
to the rate base cutoff date in the current general rate proceeding in
which the revenue requirement impact cap is applied.
(4) "Rate base cutoff date" means the date rate base additions are HOUSE BILL No. 2527—page 3
accounted for in a general rate proceeding. In the absence of a
commission order that specifies the "rate base cutoff date," "rate base
cutoff date" means the date as reflected in any jointly proposed
procedural schedule submitted by the parties in the applicable general
rate proceeding or the date that is otherwise agreed to by the parties.
(5) "Revenue requirement impact cap" means the product of:
(A)
1
/12 of 1.5% multiplied by the number of months that have
elapsed from the effective date of new base rates in an electric public
utility's most recently completed general rate proceeding to the
effective date of new base rates in the general rate proceeding in which
the cap is applied; and
(B) the retail revenue requirement used to set base rates in the
electric public utility's most recently completed general rate proceeding
concluded prior to the general rate proceeding in which the cap is
applied.
(b) The provisions of this section apply to any public utility that
has elected to make the deferrals authorized pursuant to section 1, and
amendments thereto, until the public utility's authority to make such
deferrals expires pursuant to section 1, and amendments thereto.
(c) Any part of a public utility's retail revenue requirement used to
set the public utility's base rates in any general rate proceeding of the
public utility that is concluded on or after July 1, 2024, and that
consists of a revenue requirement arising from inclusion in rate base of
the qualifying regulatory asset balance shall not exceed the revenue
requirement impact cap. If inclusion in rate base of the full balance of
the qualifying regulatory asset balance would cause the public utility to
exceed the revenue requirement impact cap, any part of the qualifying
regulatory asset balance that exceeds the revenue requirement impact
cap shall not be included in rate base and the qualifying regulatory
asset balance shall be reduced accordingly as a penalty.
Sec. 3. K.S.A. 2023 Supp. 66-101j is hereby amended to read as
follows: 66-101j. (a) Notwithstanding the provisions of K.S.A. 66-101b
or 66-109, and amendments thereto, the commission shall authorize an
electric public utility to implement economic development rate
schedules that provide discounts from otherwise applicable standard
rates for electric service for new or expanded facilities of industrial or
commercial customers that are not in the business of selling or
providing goods or services directly to the general public. To be eligible
for such discounts, such customer shall:
(1) Have incentives from one or more local, regional, state or
federal economic development agencies to locate such new or
expanded facilities in the electric public utility's certified service
territory;
(2) qualify for service under the electric public utility's non-
residential and non-lighting rate schedules for such new or expanded
facility; and
(3) not receive the discount together with service provided by the
electric public utility pursuant to any other special contract agreements.
(b) The discount authorized by this section shall only be
applicable to new facilities or expanded facilities that have:
(1) A peak demand that is reasonably projected to be at least 200
kilowatts within two years of the date the customer first receives
service under the discounted rate and is not the result of shifting
existing demand from other facilities of the customer in the electric
public utility's certified service territory and:
(A) Has an annual load factor that is reasonably projected to equal
or exceed the electric public utility's annual system load factor within
two years of the date the customer first receives service under the
discounted rate; or HOUSE BILL No. 2527—page 4
(B) otherwise warrants a discounted rate based on any of the
following factors:
(i) The number of new permanent full-time jobs created or the
percentage increase in existing permanent full-time jobs created;
(ii) the level of capital investment;
(iii) additional off-peak usage;
(iv) curtailable or interruptible load;
(v) new industry or technology; or
(vi) competition with existing industrial customers; or
(2) a peak demand that is reasonably projected to be at least 300
kilowatts within two years of the date the customer first receives
service under the discounted rate and is not the result of shifting
existing demand from other facilities of the customer in the electric
public utility's certified service territory and:
(A) An annual load factor that is reasonably projected to be at
least 55% within two years of the date the customer first receives
service under the discounted rate; and
(B) the facility shall, once first achieved, maintain the peak
demand and load factor for the remaining duration of the discounted
rate; or
(3) a peak demand that is reasonably projected to be at least 300
kilowatts 25 megawatts within two years of the date the customer first
receives service under the discounted rate and is not the result of
shifting existing demand from other facilities of the customer in the
electric public utility's certified service territory and:
(A) An annual load factor that is reasonably projected to be at
least 55% within two years of the date the customer first receives
service under the discounted rate; and
(B) the facility shall, once first achieved, maintain the peak
demand and load factor for the remaining duration of the discounted
rate.
(c) The discount authorized by this section shall be determined by
reducing otherwise applicable charges associated with the rate schedule
applicable to the new or expanded existing facility by a fixed
percentage for each year of service under the discount for a period of
up to:
(1) Five years to facilities that qualify pursuant to subsection (b)
(1) or (b)(2); and
(2) 10 years to facilities that qualify pursuant to subsection (b)(3).
(d) (1) For discounts to facilities that qualify pursuant to
subsection (b)(1), the average of the annual discount percentages shall
not:
(1) exceed 20% for discounts that qualify pursuant to subsection
(b)(1), but, except that such discounts may be between 5% to 30% in
any year; and of such five-year period.
(2) For discounts to facilities that qualify pursuant to subsection
(b)(2), the average of the annual discount percentages shall not exceed
40%, except that such discounts may be between 20% and 50% in any
year of such five-year period.
(3) For discounts to facilities that qualify pursuant to subsection
(b)(3), the average of the annual discount percentages shall not
exceed:
(A) For the first five years of the discount period, 40% for
discounts that qualify pursuant to subsection (b)(2), but, except that
such discounts may be between 20% to 50% in any year of such five-
year period; and
(B) for the final five years of the discount period, 20%, except that
such discounts may be between 10% and 30% in any year of such five-
year period. HOUSE BILL No. 2527—page 5
(d)(e) In each general rate proceeding concluded after the effective
date of this section, the commission shall allocate the reduced level of
revenues arising from the discounted rates provided for in this section
through the application of a uniform percentage adjustment to the
revenue requirement responsibility for all customer classes of the
electric public utility providing such discounted rate, including the
classes with customers that qualify for discounts under this section,
except for rates for service provided to customers under contract rates
either approved by the commission pursuant to K.S.A. 2023 Supp. 66-
101i, and amendments thereto, or the commission's general ratemaking
authority (1) Except as provided in paragraph (2), on and after July 1,
2024, the difference in revenues generated by applying the discounted
rates authorized pursuant to this section and the revenues that would
have been generated without such discounts shall not be imputed into
the electric public utility's revenue requirement.
(2) Any reduction in revenue resulting from any discount provided
pursuant to this section that was tracked by the public utility and
deferred to a regulatory asset prior to July 1, 2024, shall be
recoverable in any general rate proceeding initiated on or after July 1,
2024, through an equal percentage adjustment to the revenue
requirement responsibility for all customer classes of the public utility,
including the customer classes that include customers qualifying for
discounts pursuant to this section.
(e) (1) The commission shall approve a tracking mechanism to
track reductions in revenue experienced by the electric public utility
serving the facility as a result of the discount rate from the date the
discount rate becomes effective; and
(2) such reductions in revenue shall be deferred to a regulatory
asset and shall accrue interest at the weighted average cost of capital
used by the commission to set the electric public utility's rates in its
most recently concluded general rate proceeding with the balance of
such regulatory asset to be included in the rate base and revenue
requirement of the electric public utility in each of the utility's general
rate proceedings through an amortization of the balance over a
reasonable period until fully collected from the utility's non-contract
rate customers.
(f) The provisions of this section shall not apply to rates for
service provided to customers under contract rates approved by the
commission pursuant to K.S.A. 2023 Supp. 66-101i, and amendments
thereto, or the commission's general ratemaking authority according to
custom and practice of the commission in place prior to the effective
date of this section.
(g) Starting in January 2023, the commission shall biennially
provide a status report to the legislature about any discounts from
tariffed rates authorized pursuant to this section. Such report shall
include the:
(1) Number of entities with such discounts;
(2) number of entities with increased load;
(3) number of entities with decreased load;
(4) aggregate load and change in aggregate load on an annual
basis;
(5) total subsidy and the subsidy for each individual contract;
(6) annual and cumulative rate impact on non-contract rate
customers; and
(7) estimated economic development impact of entities with
discounted rates that occurred as a result of such discounts through an
evaluation of the annual: (A) Total employment for such entities; (B)
change in employment for such entities; and (C) tax revenue generated
by such entities. HOUSE BILL No. 2527—page 6
(h) An electric public utility shall be authorized to only implement
discounted rates for facilities that qualify for such discounted rates
pursuant to subsection (b)(3) until December 31, 2030, except that,
upon application by such public utility, the commission may authorize
the public utility to continue to implement such discounted rates for
facilities that qualify for such discounted rates pursuant to subsection
(b)(3) until December 31, 2036. Any such application shall be filed
with the commission on or before December 31, 2028. The commission
shall issue a determination on an application filed pursuant to this
subsection within 240 days of the date that such application is filed. If
requested by the public utility, an intervenor in the application docket
or commission staff, the commission shall hold a hearing on such
application. When considering and making a determination upon such
application, the commission may consider factors that the commission
deems just and reasonable and condition the commission's
determination on any factors that are relevant to the discounted rates
for facilities that qualify for such discounted rates pursuant to
subsection (b)(3). If the commission denies the public utility's
application, such denial shall only act to prohibit the public utility from
implementing discounted rates for facilities that qualify for such
discounted rates pursuant to subsection (b)(3) after December 31,
2030, and shall not otherwise affect or terminate any discounted rates
implemented by the public utility pursuant to this section or any
regulatory or ratemaking treatment of such discounted rates.
(i) For the purposes of this section:
(1) "Electric public utility" means the same as prescribed defined
in K.S.A. 66-101a, and amendments thereto, but does not include any
such utility that is a cooperative as defined in K.S.A. 66-104d, and
amendments thereto, or owned by one or more such cooperatives;
(2) "expanded facility" means a separately metered facility of the
customer, unless the utility determines that the additional costs of
separate metering of such facility would exceed the associated benefits
or that it would be difficult or impractical to install or read the meter,
that has not received service in the electric utility's certified service
territory in the previous 12 months; and
(3) "new facility" means a building of the customer that has not
received electric service in the electric utility's certified service territory
in the previous 12 months.
Sec. 4. K.S.A. 2023 Supp. 66-1239 is hereby amended to read as
follows: 66-1239. (a) As used in this section:
(1) "Commission" means the state corporation commission;
(2) "contract" means a public utility's contract for the purchase of
electric power in the amount of at least $5,000,000 $10,000,000
annually;
(3) "generating facility" means any electric generating plant or
improvement to existing generation facilities;
(4) "stake" means a public utility's whole or fractional ownership
share or leasehold or other proprietary interest in a generating facility
or transmission facility;
(5) "public utility" means the same as defined in K.S.A. 66-104,
and amendments thereto; and
(6) "transmission facility" means: (A) Any existing line, and
supporting structures and equipment, being upgraded for the transfer of
electricity with an operating voltage of 34.5 kilovolts or more of
electricity; or (B) any new line, and supporting structures and
equipment, being constructed for the transfer of electricity with an
operating voltage of 230 kilovolts or more of electricity.
(7) "Weighted average cost of capital" means the same as defined
in section 1, and amendments thereto. HOUSE BILL No. 2527—page 7
(b) (1) Prior to undertaking the construction of, or participation in,
a transmission facility, a public utility may file with the commission a
petition for a determination of the rate-making principles and treatment,
as proposed by the public utility, that will apply to the recovery in
wholesale or retail rates of the cost to be incurred by the public utility
to acquire such public utility's stake in the transmission facility during
the expected useful life of the transmission facility.
(2) The commission shall issue an order setting forth the rate-
making principles and treatment that will be applicable to the public
utility's stake in the transmission facility in all rate-making proceedings
on and after such time as the transmission facility is placed in service or
the term of the contract commences.
(3) The commission in all proceedings in which the cost of the
public utility's stake in the transmission facility is considered shall
utilize the rate-making principles and treatment applicable to the
transmission facility.
(4) If the commission fails to issue a determination within 180
240 days of the date a petition for a determination of rate-making
principles and treatment is filed, the rate-making principles and
treatment proposed by the petitioning public utility will be deemed to
have been approved by the commission and shall be binding for rate-
making purposes during the useful life of the transmission facility.
(5) If the commission does not have jurisdiction to set wholesale
rates for use of the transmission facility the commission need not
consider rate-making principles and treatment for wholesale rates for
the transmission facility.
(c) (1) Prior to undertaking the construction of, or participation in,
acquiring a stake in a generating facility, prior to entering into a new
contract or prior to retiring or abandoning a generating facility, or
within a reasonable time after retirement or abandonment if filing
before retirement or abandonment is not possible under the
circumstances, a public utility may file with the commission an
application for a determination of the rate-making principles and
treatment, as proposed by the public utility, that will apply to:
(A) Recovery in wholesale or retail rates of the cost to be incurred
by the public utility to acquire such public utility's stake in the
generating facility during the expected useful life of the generating
facility or the recovery in rates of the contract during the term thereof;
or
(B) reflection in wholesale or retail rates of the costs to be
incurred and the cost savings to be achieved by the public utility in
retiring or abandoning such public utility's stake in the generating
facility, including, but not limited to, the reasonableness of such
retirement or abandonment.
(2) Any utility seeking a determination of rate-making principles
and treatment under subsection (c)(1) shall as a part of its filing submit
the following information: (A) A description of the public utility's
conservation measures; (B) a description of the public utility's demand
side management efforts; (C) the public utility's ten-year generation and
load forecasts; and (D) a description of all power supply alternatives
considered to meet the public utility's load requirements describe how
the public utility's stake in the generating facility is consistent with the
public utility's most recent preferred plan and resource acquisition
strategy submitted to the commission.
(3) In considering the public utility's supply preferred plan and
resource acquisition strategy, the commission may consider if the
public utility issued a request for proposal from a wide audience of
participants willing and able to meet the needs identified under the
public utility's generating supply preferred plan, and if the plan selected HOUSE BILL No. 2527—page 8
by the public utility is reasonable, reliable and efficient.
(4) For requests by a public utility for a determination of
ratemaking principles and treatment relating to the abandonment or
retirement of a nuclear powered or fossil fuel-fired electric generating
unit, the commission shall not approve the abandonment or retirement
of such electric generating unit, authorize a surcharge or issuance of
bonds for the decommissioning of such electric generating unit or take
any other action that authorizes or allows for the recovery of costs for
the retirement of such electric generating unit, including stranded asset
recovery, unless:
(A) The utility demonstrates that the public utility will be able to
meet current and reasonably-anticipated future resource adequacy
requirements of the regional transmission organization or independent
system operator; and
(B) the abandonment or retirement is not expected to harm the
utility's customers or decrease the utility's regional rate
competitiveness by causing the utility to experience higher costs than
would be expected by continuing to operate such electric generating
unit in compliance with applicable law, unless, consistent with the
integrated resource planning framework utilized by the commission,
the commission determines that such higher costs are justified by other
factors that are specified by the commission. The utility shall provide
the commission with evidence of all known direct and indirect costs of
abandonment or retirement of the electric generating unit and
demonstrate that cost savings or avoided or mitigated cost increases to
customers will occur as a result of the abandonment or retirement of
the electric generating unit.
(5) The commission shall issue an order setting forth the rate-
making principles and treatment that will be applicable to the public
utility's stake in the generating facility or to the contract in all rate-
making proceedings and all securitization proceedings on and after
such time as the generating facility is:
(A) Placed in service or the term of the contract commences; or
(B) retired or abandoned.
(5)(6) (A) With respect to a new gas-fired generating facility,
unless the commission timely elects not to set forth ratemaking
principles applicable in the future on the grounds that acquiring a
stake in such a generating facility is not reasonable, then
notwithstanding any other provision of law, the public utility shall be
permitted to implement a new rate adjustment mechanism designed to
recover the return on 100% of amounts recorded to construction work
in progress on the public utility's books for the public utility's stake in
such a generating facility, which shall not exceed the definitive cost
estimate found reasonable by the commission in a proceeding
conducted pursuant to this section for the public utility's acquisition of
the public utility's stake in such generating facility, unless otherwise
ordered by the commission in a subsequent proceeding, at the weighted
average cost of capital without offset, adjustment or reduction for any
other issue or consideration, except that such return shall be in lieu of
any otherwise applicable allowance for funds used during construction
that would have accrued from and after the effective date of inclusion
of construction work in progress in such rate adjustment mechanism. A
rate adjustment mechanism authorized pursuant to this section shall
become effective not sooner than 365 days after construction of the
generation facility begins and within 60 days of the filing for the
establishment of such mechanism by the public utility. As construction
of the public utility's stake in such a generating facility continues and
the balance of construction work in progress grows, the rate
adjustment mechanism in effect shall be subject to periodic increases, HOUSE BILL No. 2527—page 9
without adjustment, offset or reduction for any other issue or
consideration, except that such periodic increases shall not occur more
frequently than once every six months. Except as provided in this
section, the public utility's customers shall be charged pursuant to such
rate adjustment mechanism until such time as new base rates reflecting
the public utility's investment in such generating facility take effect,
with such base rates to include a deferral for depreciation expense
incurred and carrying costs on any unrecovered portion of such
investment at the public utility's weighted average cost of capital as
determined in the rate-making proceeding setting such base rates that
occurred between the date such generation facility was placed in
service on the public utility's books and the effective date of base rates
in such proceeding. A rate adjustment mechanism authorized pursuant
to this section shall be permitted to remain in effect for a period not to
exceed six years.
(B) If a public utility implements a rate adjustment mechanism
pursuant to this paragraph and subsequently terminates the initiative
to acquire a stake in the generating facility, the commission shall have
the authority, after a hearing is held on the matter, to order the public
utility to refund customers any amounts collected through such rate
adjustment mechanism.
(C) A public utility shall be authorized to implement a rate
adjustment mechanism pursuant to this paragraph until December 31,
2030, except that, upon application by such public utility, the
commission may authorize the public utility to continue to implement a
rate adjustment mechanism pursuant to this paragraph until December
31, 2036. Any such application shall be filed with the commission on or
before December 31, 2028. The commission shall issue a determination
on an application filed pursuant to this subsection within 240 days of
the date that such application is filed. If requested by the public utility,
an intervenor in the application docket or commission staff, the
commission shall hold a hearing on such application. When
considering and making a determination upon such application, the
commission may consider factors that the commission deems just and
reasonable and condition the commission's determination on any
factors that are relevant to the rate adjustment mechanism authorized
pursuant to this paragraph. If the commission denies the public utility's
application, such denial shall only act to prohibit the public utility from
implementing a rate adjustment mechanism after December 31, 2030,
and shall not otherwise affect or terminate any rate adjustment
mechanism implemented by the public utility pursuant to this section or
any regulatory or ratemaking treatment of such rate adjustment
mechanism.
(7) The commission in all proceedings in which the cost of the
public utility's stake in the generating facility or the cost of the
purchased power under the contract is considered shall utilize the rate-
making principles and treatment applicable to the generating facility,
contract or retired or abandoned generating facility.
(6)(8) If the commission fails to issue a determination within 180
240 days of the date a petition for a determination of rate-making
principles and treatment is filed, the rate-making principles and
treatment proposed by the petitioning public utility will be deemed to
have been approved by the commission and shall be binding for rate-
making purposes during the useful life of the generating facility, during
the term of the contract or during the period when the cost of the retired
or abandoned generating facility is reflected in customer rates.
(d) (1) It is the intent of the legislature that when a public utility
files a petition for a determination of ratemaking principles and
treatment pursuant to subsection (b) or (c), consistent with the state HOUSE BILL No. 2527—page 10
corporation commission's customary practices, the commission shall:
(A) Issue a determination on such petition in an expeditious
manner; and
(B) when circumstances allow, attempt to issue such
determination in a period of time that is less than the 240-day deadline
to issue such determination established pursuant to subsection (b) or
(c).
(2) In furtherance of such legislative intent, a public utility that
intends to file a petition for a determination of ratemaking principles
and treatment pursuant to this section shall provide notice to the
commission of such public utility's intent to file such petition not less
than 30 days before filing a petition pursuant to this section. Upon
receipt of such notice, the commission shall provide notice of the public
utility's intent to file a petition pursuant to this section to each person
or entity that was a party to or an intervenor in the public utility's most
recently concluded base rate case.
(3) In any proceeding conducted pursuant to this section, any
application for intervention in such proceeding shall be submitted not
later than 10 days after the public utility's filing of a petition for a
determination of ratemaking principles and treatment. The commission
shall adopt a procedural schedule for the proceeding not later than 30
days after a public utility files a petition for a determination of
ratemaking principles and treatment pursuant to this section.
(e) The public utility shall have one year from the effective date of
the determination of the commission to notify the commission whether
it will construct or participate in the construction of acquire a stake in
the generating or transmission facility, whether it will perform under
terms of the contract or whether it will retire or abandon the generating
facility.
(e)(f) If the public utility notifies the commission within the one-
year period that the public utility will not construct or participate in the
construction of acquire a stake in the generating or transmission
facility, that it will not perform under the terms of the contract or that it
will not retire or abandon the generating facility, then the determination
of rate-making principles pursuant to subsection (b) or (c) shall be of
no further force or effect, shall have no precedential value in any
subsequent proceeding, and there shall be no adverse presumption
applied in any future proceeding as a result of such notification.
(f)(g) If the public utility notifies the commission under subsection
(d) (e) that it will construct or participate acquire a stake in a
generating facility or participate in a purchase power contract and
subsequently does not, or that it will retire or abandon a generating
facility and subsequently does not, it will be required to notify the
commission immediately in the proceeding it initiated pursuant to this
section and file an alternative supply plan with the commission
pursuant to subsection (c) within 90 days provide notification of a
change in the utility's preferred resource plan as required by
commission order.
(h) For nuclear powered and coal-fired electric generating
facilities, if determined by the commission to be just, reasonable and
necessary for the provision of sufficient and efficient service, an
electric public utility shall be permitted to:
(1) Retain such facilities in such utility's rate base;
(2) recover expenses associated with the operation of such
facilities that remain in service to provide greater certainty that
generating capacity will be available to provide essential service to
customers, including during extreme weather events; and
(3) recover any portion of such utility's rate base and prudently
incurred expenses necessary for such facilities: HOUSE BILL No. 2527—page 11
(A) To operate at a low-capacity factor; or
(B) that are offline during normal operating conditions and
providing capacity only.
(i) The commission shall prepare and submit to the legislature by
December 1 of each year an annual report based on the preceding
calendar year that provides:
(1) The number of requests by utilities to retire electric generating
units in the state, the nameplate capacity of each of those units and
whether the request was approved or denied by the commission;
(2) the impact of any commission-approved retirement of an
electric generating unit on the:
(A) Utility's and state's generation capacity by fuel type;
(B) required capacity reserve margins for the utility and the
overall capacity reserve margin within the state;
(C) utility's need for capacity additions or expansions at new or
existing facilities as a result of the retirement; and
(D) utility's need for additional power or capacity reserve
arrangements; and
(3) whether the retirement resulted in stranded costs for
ratepayers that will be recovered by the utility through securitization or
some other charge on customer bills.
(j) The provisions of subsection (c)(4) shall expire on July 1,
2034.
Sec. 5. K.S.A. 66-1264 is hereby amended to read as follows: 66-
1264. As used in the net metering and easy connection act:
(a) "Commission" means the state corporation commission.
(b) "Customer-generator" means the owner or operator of a net
metered facility which that:
(1) Is powered by a renewable energy resource;
(2) is located on a premises owned, operated, leased or otherwise
controlled by the customer-generator;
(3) is interconnected and operates in parallel phase and
synchronization with an affected utility and is in compliance with the
standards established by the affected utility;
(4) is intended primarily to offset part or all of the customer-
generator's own electrical energy requirements such that the customer-
generator will fully consume the energy output or will deliver the
remaining energy output and all other services to the utility; and
(5) contains a an underwriter laboratories listed mechanism,
approved by the utility, that automatically disables the unit and
interrupts the flow of electricity back onto the supplier's utility's
electricity lines in the event that service to the customer-generator is
interrupted.
(c) "Export" means power that flows from a customer-generator's
electrical system through a customer's billing meter and onto the
utility's electricity lines.
(d) "Generating capacity" means the maximum amount of
alternating current power that a customer generator's net metered
system can produce.
(e) "Peak demand" shall have the meaning ascribed thereto means
the same as defined in K.S.A. 66-1257, and amendments thereto.
(f) "Permission to operate" means the operational date of the
customer-generator's net metered facility.
(d)(g) "Renewable energy resources" shall have the meaning
ascribed thereto means the same as defined in K.S.A. 66-1257, and
amendments thereto.
(h) "Supplied" means power that flows from the utility's electricity
lines through a customer's billing meter and into a customer-
generator's electrical system. HOUSE BILL No. 2527—page 12
(e)(i) "Utility" means investor-owned electric utility.
(j) "Witness test" means a representative of the utility is on-site to
measure or verify a specific setting or operational condition.
Sec. 6. K.S.A. 66-1265 is hereby amended to read as follows: 66-
1265. Each utility shall:
(a) (1) Except as provided in paragraph (2), make net metering
available to customer-generators who are in good standing with the
utility on a first-come, first-served basis, until the total rated generating
capacity as approved by the utility of all net metered systems equals or
exceeds one:
(A) Commencing July 1, 2024, percent 2% of the utility's peak
demand during the previous year;
(B) commencing July 1, 2025, 3% of the utility's peak demand
during the previous year;
(C) commencing July 1, 2026, 4% of the utility's peak demand
during the previous year; and
(D) commencing July 1, 2027, and each year thereafter, 5% of the
utility's historic highest annual peak demand since 2014.
(2) The commission may increase the total rated generating
capacity of all net metered systems to an amount above one percent 5%
after conducting a hearing pursuant to K.S.A. 66-101d, and
amendments thereto;
(b) provide an appropriate class bidirectional meter to the
customer-generator at no charge, but may charge the customer-
generator for the cost of any additional metering or distribution
equipment necessary to accommodate the customer-generator's facility;
(c) disclose annually the availability of the net metering program
to each of its customers with the method and manner of disclosure
being at the discretion of the utility;
(d) for any customer-generator which that began operating its
renewable energy resource under an interconnect agreement with the
utility prior to July 1, 2014, offer to the customer-generator a tariff or
contract that is identical in electrical energy rates, rate structure and
monthly charges to the contract or tariff that the customer would be
assigned if the customer were not an eligible customer-generator and
shall not charge the customer-generator any additional standby,
capacity, interconnection or other fee or charge that would not
otherwise be charged if the customer were not an eligible customer-
generator; and
(e) for any customer-generator which that began operating its
renewable energy resource under an interconnect agreement with the
utility on or after July 1, 2014, have the option to propose, within an
appropriate rate proceeding, the application of time-of-use rates,
minimum bills, incentive programs or other rate structures that would
apply to all such customer-generators prospectively.
Sec. 7. K.S.A. 66-1266 is hereby amended to read as follows: 66-
1266. (a) Prior to January 1, 2030, for any customer-generator that
began operating a renewable energy resource under an interconnect
agreement with the utility prior to July 1, 2014:
(1) If the electricity supplied by the utility exceeds the electricity
generated exported by the customer-generator during a billing period,
the customer-generator shall be billed for the net electricity supplied by
the utility in accordance with normal practices for customers in the
same rate class.
(2) If such customer-generator generates exports electricity in
excess of the customer-generator's monthly consumption electricity
supplied by the utility, all such net excess energy (NEG) generation,
expressed in kilowatt-hours, shall be carried forward from month-to-
month and credited at a ratio of one-to-one against the customer- HOUSE BILL No. 2527—page 13
generator's energy consumption electricity supplied by the utility,
expressed in kilowatt-hours, in subsequent months.
(3) Any interconnect agreement between such customer-generator
and a utility and all such NEG generated net excess generation
exported under such agreement shall be transferrable transferable and
continue in place until January 1, 2030, regardless of whether there is a
change in ownership of the property on which where the renewable
energy resource is located.
(4) Any NEG resulting net excess generation exported from
renewable energy resources that are installed on and after July 1, 2014,
but are part of an installation of a renewable energy resource that was
operating prior to July 1, 2014, shall be carried forward and credited to
the customer as if such resources had begun operation prior to July 1,
2014.
(5) Any net excess generation credit remaining in a net-metering
customer's account on March 31 of each year shall expire.
(b) For any customer-generator that began operating a renewable
energy resource under an interconnect agreement with the utility on and
after July 1, 2014:
(1) If the electricity supplied by the utility exceeds the electricity
generated exported by the customer-generator during a billing period,
the customer-generator shall be billed for the net electricity supplied by
the utility.
(2) If such customer-generator generates exports electricity in
excess of the customer-generator's monthly consumption electricity
supplied by the utility, all such NEG net excess generation remaining in
such customer-generator's account at the end of each billing period
shall be credited to the customer at a rate of at least 100% of the
utility's monthly system average cost of energy per kilowatt hour.
(c) Except as otherwise provided in subsection (d), on and after
January 1, 2030, for all customer-generators, regardless of when such
customer-generators entered into an interconnect agreement with the
utility:
(1) If the electricity supplied by the utility exceeds the electricity
generated exported by the customer-generator during a billing period,
the customer-generator shall be billed for the net electricity supplied by
the utility; and
(2) if such customer-generator generates exports electricity in
excess of the customer-generator's monthly consumption electricity
supplied by the utility, all such NEG net excess generation remaining in
a customer-generator's account at the end of each billing period shall be
credited to the customer at a rate of at least 100% of the utility's
monthly system average cost of energy per kilowatt hour.
(d) For any customer-generator that began operating a renewable
energy resource under an interconnect agreement with the utility on
and after July 1, 2024, and receives service on an optional time-
varying rate:
(1) The utility shall measure the net electrical energy exported or
supplied during the billing period for each of the time of use periods
established by the applicable time-varying rate schedule that applies to
the customer-generator's rate class in accordance with normal
metering practices for customers that take service on time-varying
rates in that same rate class;
(2) electricity supplied by the utility shall be netted against the
electricity exported by the customer-generator during each applicable
time of use period;
(3) if the electricity supplied by the utility exceeds the electricity
exported by the customer-generator during any time of use period, the
customer-generator shall be billed for the net electricity supplied by HOUSE BILL No. 2527—page 14
the utility in each such time of use period as well as all other charges
as such charges are applied to non-customer-generators in the same
rate class; and
(4) if the electricity exported by the customer-generator exceeds
the electricity supplied by the utility during any time of use period, the
customer-generator shall be credited at a rate of at least 100% of the
utility's monthly system average cost of energy per kilowatt hour, with
any net credit, and net of all other charges as such charges are applied
to non-customer-generators in the same rate class, applied to the next
billing period.
Sec. 8. K.S.A. 66-1267 is hereby amended to read as follows: 66-
1267. (a) For customer-generators that began operating a renewable
energy resource under an interconnect agreement with the utility prior
to July 1, 2014:
(1) Such utility shall allow:
(A) Residential customer-generators to generate export electricity
subject to net metering up to 25 kilowatts; and
(B) commercial, industrial, school, local government, state
government, federal government, agricultural and institutional
customer-generators to generate export electricity subject to net
metering up to 200 kilowatts.
(2) Nothing in this act shall be construed to prevent such
customer-generators from installing additional renewable energy
resources after July 1, 2014, that will generate electricity pursuant to
the restrictions contained in paragraph (1).
(b) For customer-generators that begin operating a renewable
energy resource under an interconnect agreement with the utility after
July 1, 2014, such utility shall allow:
(1) All residential customer-generators to generate electricity
subject to net metering up to 15 kilowatts;
(2) commercial, industrial, religious institution, local government,
state government, federal government, agricultural and industrial
customer-generators to generate electricity subject to net metering up to
100 kilowatts, unless otherwise agreed to by the utility and the
customer-generator; and
(3) school customer-generators to generate electricity subject to
net metering up to 150 kilowatts. For the purpose of this section,
"school" means any postsecondary educational institution as defined in
K.S.A. 74-3201b, and amendments thereto, or any public or private
school which provides instruction for students enrolled in grade
kindergarten or grades one through 12 customer-generators to export
electricity subject to net metering up to 150 kilowatts alternating
current.
(c) Customer-generators shall appropriately size their generation
export capacity to their expected load as follows:
(1) (A) (i) Divide the customer-generator's historic consumption
in kilowatt-hours for the previous 12-month period by 8,760; and
(ii) divide the quotient calculated pursuant to paragraph (1)(A)(i)
by a capacity factor of 0.144; or
(B) if the customer-generator does not have historic consumption
data that adequately reflects the customer's consumption at such
premises, the customer-generator's historic consumption for the
previous 12-month period shall be 7.15 kilowatt-hours per square foot
of conditioned space; and
(2) round up the quotient calculated pursuant to paragraph (1)(A)
(i) or the amount determined pursuant to paragraph (1)(B) to the
nearest standard size as follows:
(A) Between two kilowatts alternating current power and 20
kilowatts alternating current power, round up to the nearest two HOUSE BILL No. 2527—page 15
kilowatts alternating current power increment; and
(B) between 20 kilowatts alternating current power and 150
kilowatts alternating current power, round up to the nearest five
kilowatts alternating current power increment.
(d) For customer-generators that operate a renewable energy
resource under an interconnect agreement with the affected utility on
or after January 1, 2026:
(1) The generating capacity of a customer-generator's renewable
energy resource as approved by the affected utility shall not exceed
export capacity by more than 50%; and
(2) energy storage capacity, including electric vehicles or other
portable energy storage devices, shall not be included in any sizing
formulas unless the energy storage device has the ability to add export
capacity and is not part of an export limited system.
(e) For customer-generators that operate a generation resource
designed to export an amount of power that differs from the system's
generating capacity:
(1) The customer-generator shall own and maintain any necessary
export limiting device;
(2) protections shall be in place to restrict the export limiting
device settings to qualified persons;
(3) the utility shall have the option to require a witness test of the
export limiting device's function or set points prior to granting
permission to operate;
(4) the export capacity of the system shall not be increased
without prior approval from the utility;
(5) the customer-generator shall allow the utility to perform
periodic witness testing of the export limiting device's function or
settings upon request;
(6) if the export limiting device's settings are incorrect or if the
device fails to limit the export of power below the designed export
capacity for more than 15 minutes in any single event, the customer-
generator shall cease operation of the system until repair or
reprogramming of the limiting device is completed; and
(7) the utility shall not restrict the brand or model of the limiting
device if the device is approved by the generator's manufacturer or is
underwriter laboratories listed to perform such operations in
conjunction with the customer-generator's system. HOUSE BILL No. 2527—page 16
Sec. 9. K.S.A. 66-1264, 66-1265, 66-1266 and 66-1267 and
K.S.A. 2023 Supp. 66-101j and 66-1239 are hereby repealed.
Sec. 10. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the HOUSE, and was
adopted by that body
HOUSE adopted
Conference Committee Report
Speaker of the House.
Chief Clerk of the House.
Passed the SENATE
as amended
SENATE adopted
Conference Committee Report
President of the Senate.
Secretary of the Senate.
APPROVED
Governor.