SESSION OF 2024
SUPPLEMENTAL NOTE ON SENATE BILL NO. 455
As Amended by Senate Committee on Utilities
Brief*
SB 455, as amended, would add and amend law
regarding electric public utilities, coal-fired electric generating
facilities, and the Kansas Corporation Commission
(Commission).
Requirements for Coal-fired Electric Generating Facilities
The bill would include coal-fired electric generating
facilities, if determined by the Commission to be just,
reasonable, and necessary for the provision of sufficient and
efficient service.
Additionally, the bill would require coal-fired electric
generating facilities to do the following:
●Retain rate base appropriate to the facility;
●Recover expenses associated with operational
costs to provide greater certainty that generating
capacity will be available to all customers, including
during extreme weather events; and
●Recover any portion of the rate base and expenses
that are necessary for generation facilities to
operate at a low-capacity factor or to provide
additional capacity while remaining offline during
normal operating conditions.
____________________
*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 Abandonment or Retirement of Fossil Fuel Electric
Generating Units
The bill would prohibit the Commission from approving
the retirement of a unit, authorizing surcharges or issuance of
bonds for the decommissioning of a unit, or taking any other
action which would authorize or allow for the recovery of
costs related to the retirement of a unit, including stranded
asset recovery, unless the Commission finds the following
through sufficient evidence:
●The utility will replace the retired or abandoned unit
with new electric generating capacity that:
○The electric generating capacity is equal to or
greater than necessary to meet the minimum
reserve capacity requirements set forth by the
utility’s reliability coordinator;
○Is dispatchable by the utility, regional
transmission organization, or independent
system operator;
○Maintains or improves the reliability and
resilience of the electric transmission grid;
and
●The abandonment or retirement of the unit will not
harm the utility’s ratepayers or decrease the utility’s
regional rate competitiveness, unless the
Commission determines higher costs are justified
in specified factors and are consistent with the
integrated resource planning framework. The utility
would be required to provide the Commission with
evidence of all known direct and indirect costs
related to the retirement or abandonment of the
unit and demonstrate such cost savings or avoided
or mitigated cost increases to customers will occur
as a result; and
●The abandonment or retirement of the unit is for
economic purposes and for the benefit of the
2- 455 customers and not principally based on achieving
environmental, social, or governmental goals which
are not mandated by federal or state laws, unless
otherwise required.
Petition for Determination of Ratemaking Principles and
Treatment
The bill would amend current law by extending the
timelines from 180 days to 240 days for the Commission to
make a determination of rate-making principles and treatment
proposed by a petitioning public utility.
The bill would also establish guidelines for the
Commission upon the instance a public utility files a petition
for a determination of ratemaking principles and treatment,
requiring the following:
●The issuance of a determination in an expeditious
manner; and
●When circumstances allow, issue a determination
in a time frame shorter than the 240 day deadline.
The bill would also require a public utility to provide the
Commission a notice no less than 30 days before the filing of
a petition. The bill would require the Commission, upon
receipt of the notice, to provide a notice of the public utility’s
intent to file a petition to each person or entity involved in the
public utility’s most recently concluded base rate case.
The bill would also establish proceedings guidelines:
●The application for intervention in any proceedings
must be submitted no later than 10 days after the
public utility’s filing of a petition for determination of
ratemaking principles and treatments; and
3- 455 ●The Commission must adopt a procedural
schedule for the proceedings no later than 30 days
after a petition files for a determination of
ratemaking principles and treatments.
Annual Reports
The bill would require the Commission to prepare and
submit an annual report to the Legislature by December 1
each year, detailing:
●The number of unit retirement requests in the state;
●The nameplate capacity of each of the requested
units;
●Whether the request was approved or denied by
the Commission;
●The impact of any Commission-approved
retirement of a unit on the:
○Utility’s and state’s generation fuel mix;
○Required capacity reserve margins for the
utility;
○Need for capacity additions or expansions at
new or existing facilities as a result of a unit
retirement; and
○Need for additional power or capacity reserve
arrangements, and
●Whether the retirement resulted in stranded costs
for ratepayers that will be recovered by the utility
through securitization or through some other
charge on the customer bill.
The provisions of this section of the bill would expire on
July 1, 2034.
4- 455 Background
The bill was introduced by the Senate Committee on
Utilities at the request of a representative from Evergy.
[Note: The bill was amended by the Senate Committee
on Utilities to include amended provisions of SB 456, the
background of which is listed below.]
SB 455
Senate Committee on Utilities
In the Senate Committee hearing on the bill, proponent
testimony was provided by a representative from Evergy. The
proponent indicated the bill would be a tool that would provide
flexibility for how Evergy manages its generation fleet. The
proponent stated the language in the bill would allow a coal
plant to run less but still be available for winter and summer
peaks when needed for reliability. The proponent expressed
that this legislation would prevent outside entities from forcing
a coal plant to shut down due to inactivity.
Opponent testimony was provided by a representative
from the Kansas Sierra Club. The representative indicated
the Kansas Sierra Club is uncomfortable with policy
proposals that would prolong coal plant use when more
ecofriendly resources are available. Additionally, the
representative indicated this legislation does not make a
significant change to the current status quo of energy
regulation, nor does it give Kansans or their leaders a
comprehensive vision of Kansas’ energy future.
Neutral testimony was provided by a representative from
the Kansas Industrial Consumers Group and Kansans for
Lower Energy Rates and a representative from the
Commission. Both representatives expressed concern over
the necessity of the bill at this time.
5- 455 The Senate Committee amended the bill to:
●Require the Commission to issue a determination
of ratemaking principles and treatment within 240
days of the date of the petition filing;
●Establish guidelines for the Commission regarding
the retirement or abandonment of a fossil-fuel fired
electric generating unit;
●Add language describing legislative intent in
regards to the filing of a petition for a determination
of ratemaking principles and treatment; and
●Establish an annual report to be submitted by the
Commission to the Legislature by December 1 of
each year until July 1, 2034.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Commission and
Citizen’s Utility Ratepayer Board indicated the enactment of
the bill would have no fiscal effect.
SB 456
The bill was introduced by the Senate Committee on
Utilities at the request of a representative of the Kansas
Chamber.
Senate Committee on Utilities
In the Senate Committee hearing, proponent testimony
was provided by representatives from the Kansas Chamber,
Kansas Electric Cooperatives, Kansas Industrial Consumers
Group, and Kansans for Lower Electric Rates. The
proponents indicated the bill is a straightforward approach to
establish criteria to ensure that fossil fuel generation that
6- 455 customers have paid for will not be prematurely retired or
abandoned without thorough consideration by the
Commission. The proponents explained the bill provides
certainty to all stakeholders, including customers, that Kansas
will have sufficient generating resources for the future.
Written-only proponent testimony was provided by a
representative from the Citizens’ Utility Ratepayers Board.
Opponent testimony was provided by representatives
from Kansas Interfaith Action and Kansas Sierra Club. The
opponents indicated the enactment of the bill is unnecessary
as utilities and regulators already consider a robust set of
criteria and considerations in their evaluations of utility plans
and proposals. The opponents further expressed without
provisions distinguishing the evaluation of power generation
in near-term or long-term components, the bill would create a
disposition against beneficial investments with payoffs over
time.
Neutral testimony was provided by representatives from
the Commission, the Energy Policy Network, and Evergy.
Written-only neutral testimony was provided by a
representative from The Nature Conservancy.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Commission and
Citizen’s Utility Ratepayer Board indicated the enactment of
the bill would have no fiscal effect.
Kansas Corporation Commission; electric generating facilities; fossil fuels;
generation; rate base; coal-fired electric generating facilities; public utilities; rates;
transmission; fossil-fuel fired electric generation units; retirement; abandonment;
annual retirement request report
7- 455