Kansas 2025-2026 Regular Session

Kansas Senate Bill SB289 Compare Versions

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1	1	Session of 2025
2	2	SENATE BILL No. 289
3	3	By Committee on Federal and State Affairs
4	4	3-4
5	5	AN ACT concerning public utilities; relating to economic development
6	6	electric rates; requiring economic development electric rate discounts
7	7	to cover the incremental and variable costs to serve customers that
8	8	receive the discount; amending K.S.A. 2024 Supp. 66-101j and
9	9	repealing the existing section.
10	10	Be it enacted by the Legislature of the State of Kansas:
11	11	Section 1. K.S.A. 2024 Supp. 66-101j is hereby amended to read as
12	12	follows: 66-101j. (a) Notwithstanding the provisions of K.S.A. 66-101b or
13	13	66-109, and amendments thereto, the commission shall authorize an
14	14	electric public utility to implement economic development rate schedules
15	15	that provide discounts from otherwise applicable standard rates for electric
16	16	service for new or expanded facilities of industrial or commercial
17	17	customers that are not in the business of selling or providing goods or
18	18	services directly to the general public. To be eligible for such discounts,
19	19	such customer shall:
20	20	(1) Have incentives from one or more local, regional, state or federal
21	21	economic development agencies to locate such new or expanded facilities
22	22	in the electric public utility's certified service territory;
23	23	(2) qualify for service under the electric public utility's non-
24	24	residential and non-lighting rate schedules for such new or expanded
25	25	facility; and
26	26	(3) not receive the discount together with service provided by the
27	27	electric public utility pursuant to any other special contract agreements.
28	28	(b) The discount authorized by this section shall only be applicable to
29	29	new facilities or expanded facilities that have:
30	30	(1) A peak demand that is reasonably projected to be at least 200
31	31	kilowatts within two years of the date the customer first receives service
32	32	under the discounted rate and is not the result of shifting existing demand
33	33	from other facilities of the customer in the electric public utility's certified
34	34	service territory and:
35	35	(A) Has an annual load factor that is reasonably projected to equal or
36	36	exceed the electric public utility's annual system load factor within two
37	37	years of the date that the customer first receives service under the
38	38	discounted rate; or
39	39	(B) otherwise warrants a discounted rate based on any of the
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76	76	following factors:
77	77	(i) The number of new permanent full-time jobs created or the
78	78	percentage increase in existing permanent full-time jobs created;
79	79	(ii) the level of capital investment;
80	80	(iii) additional off-peak usage;
81	81	(iv) curtailable or interruptible load;
82	82	(v) new industry or technology; or
83	83	(vi) competition with existing industrial customers;
84	84	(2) a peak demand that is reasonably projected to be at least 300
85	85	kilowatts within two years of the date that the customer first receives
86	86	service under the discounted rate and is not the result of shifting existing
87	87	demand from other facilities of the customer in the electric public utility's
88	88	certified service territory and:
89	89	(A) An annual load factor that is reasonably projected to be at least
90	90	55% within two years of the date that the customer first receives service
91	91	under the discounted rate; and
92	92	(B) the facility shall, once first achieved, maintain the peak demand
93	93	and load factor for the remaining duration of the discounted rate; or
94	94	(3) a peak demand that is reasonably projected to be at least 25
95	95	megawatts within two years of the date that the customer first receives
96	96	service under the discounted rate and is not the result of shifting existing
97	97	demand from other facilities of the customer in the electric public utility's
98	98	certified service territory and:
99	99	(A) An annual load factor that is reasonably projected to be at least
100	100	55% within two years of the date that the customer first receives service
101	101	under the discounted rate; and
102	102	(B) the facility shall, once first achieved, maintain the peak demand
103	103	and load factor for the remaining duration of the discounted rate.
104	104	(c) The discount authorized by this section shall be determined by
105	105	reducing otherwise applicable charges associated with the rate schedule
106	106	applicable to the new or expanded existing facility by a fixed percentage
107	107	for each year of service under the discount for a period of up to:
108	108	(1) Five years to facilities that qualify pursuant to subsection (b)(1) or
109	109	(b)(2); and
110	110	(2) 10 years to facilities that qualify pursuant to subsection (b)(3).
111	111	(d) (1) For discounts to facilities that qualify pursuant to subsection
112	112	(b)(1), the average of the annual discount percentages shall not exceed
113	113	20%, except that such discounts may be between 5% to and 30% in any
114	114	year of such five-year period.
115	115	(2) For discounts to facilities that qualify pursuant to subsection (b)
116	116	(2), the average of the annual discount percentages shall not exceed 40%,
117	117	except that such discounts may be between 20% and 50% in any year of
118	118	such five-year period.
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162	162	(3) For discounts to facilities that qualify pursuant to subsection (b)
163	163	(3), the average of the annual discount percentages shall not exceed:
164	164	(A) For the first five years of the discount period, 40%, except that
165	165	such discounts may be between 20% to and 50% in any year of such five-
166	166	year period; and
167	167	(B) for the final five years of the discount period, 20%, except that
168	168	such discounts may be between 10% and 30% in any year of such five-
169	169	year period.
170	170	(e) (1) Except as provided in paragraph (2), on and after July 1, 2024,
171	171	the difference in revenues generated by applying the discounted rates
172	172	authorized pursuant to this section and the revenues that would have been
173	173	generated without such discounts shall not be imputed into the electric
174	174	public utility's revenue requirement.
175	175	(2) Any reduction in revenue resulting from any discount provided
176	176	pursuant to this section that was tracked by the public utility and deferred
177	177	to a regulatory asset prior to July 1, 2024, shall be recoverable in any
178	178	general rate proceeding initiated on or after July 1, 2024, through an equal
179	179	percentage adjustment to the revenue requirement responsibility for all
180	180	customer classes of the public utility, including the customer classes that
181	181	include customers qualifying for discounts pursuant to this section.
182	182	(f) On and after July 1, 2025, the commission shall not authorize an
183	183	electric public utility to commence implementation of a discounted electric
184	184	development rate pursuant to this section for any new or expanded facility
185	185	of an industrial or commercial customer unless such discounted rate is
186	186	sufficient to cover the incremental and variable cost to serve such
187	187	customer. Nothing in this subsection shall be construed to affect or limit
188	188	any discounted electric development rate that was first implemented prior
189	189	to July 1, 2025.
190	190	(g) The provisions of this section shall not apply to rates for service
191	191	provided to customers under contract rates approved by the commission
192	192	pursuant to K.S.A. 2024 Supp. 66-101i, and amendments thereto, or the
193	193	commission's general ratemaking authority according to custom and
194	194	practice of the commission in place prior to the effective date of this
195	195	section.
196	196	(g)(h) Starting in January 2023, the commission shall biennially
197	197	provide a status report to the legislature about any discounts from tariffed
198	198	rates authorized pursuant to this section. Such report shall include the:
199	199	(1) Number of entities with such discounts;
200	200	(2) number of entities with increased load;
201	201	(3) number of entities with decreased load;
202	202	(4) aggregate load and change in aggregate load on an annual basis;
203	203	(5) total subsidy and the subsidy for each individual contract;
204	204	(6) annual and cumulative rate impact on non-contract rate
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248	248	customers; and
249	249	(7) estimated economic development impact of entities with
250	250	discounted rates that occurred as a result of such discounts through an
251	251	evaluation of the annual: (A) Total employment for such entities; (B)
252	252	change in employment for such entities; and (C) tax revenue generated by
253	253	such entities.
254	254	(h)(i) An electric public utility shall be authorized to only implement
255	255	discounted rates for facilities that qualify for such discounted rates
256	256	pursuant to subsection (b)(3) until December 31, 2030, except that, upon
257	257	application by such public utility, the commission may authorize the public
258	258	utility to continue to implement such discounted rates for facilities that
259	259	qualify for such discounted rates pursuant to subsection (b)(3) until
260	260	December 31, 2036. Any such application shall be filed with the
261	261	commission on or before December 31, 2028. The commission shall issue
262	262	a determination on an application filed pursuant to this subsection within
263	263	240 days of the date that such application is filed. If requested by the
264	264	public utility, an intervenor in the application docket or commission staff,
265	265	the commission shall hold a hearing on such application. When
266	266	considering and making a determination upon such application, the
267	267	commission may consider factors that the commission deems just and
268	268	reasonable and condition the commission's determination on any factors
269	269	that are relevant to the discounted rates for facilities that qualify for such
270	270	discounted rates pursuant to subsection (b)(3). If the commission denies
271	271	the public utility's application, such denial shall only act to prohibit the
272	272	public utility from implementing discounted rates for facilities that qualify
273	273	for such discounted rates pursuant to subsection (b)(3) after December 31,
274	274	2030, and shall not otherwise affect or terminate any discounted rates
275	275	implemented by the public utility pursuant to this section or any regulatory
276	276	or ratemaking treatment of such discounted rates.
277	277	(i)(j) For the purposes of this section:
278	278	(1) "Electric public utility" means the same as defined in K.S.A. 66-
279	279	101a, and amendments thereto, but does not include any such utility that is
280	280	a cooperative as defined in K.S.A. 66-104d, and amendments thereto, or
281	281	owned by one or more such cooperatives;
282	282	(2) "expanded facility" means a separately metered facility of the
283	283	customer, unless the utility determines that the additional costs of separate
284	284	metering of such facility would exceed the associated benefits or that it
285	285	would be difficult or impractical to install or read the meter, that has not
286	286	received service in the electric utility's certified service territory in the
287	287	previous 12 months; and
288	288	(3) "new facility" means a building of the customer that has not
289	289	received electric service in the electric utility's certified service territory in
290	290	the previous 12 months.
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334	334	Sec. 2. K.S.A. 2024 Supp. 66-101j is hereby repealed.
335	335	Sec. 3. This act shall take effect and be in force from and after its
336	336	publication in the statute book.
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