Session of 2025
SENATE BILL No. 289
By Committee on Federal and State Affairs
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AN ACT concerning public utilities; relating to economic development
electric rates; requiring economic development electric rate discounts
to cover the incremental and variable costs to serve customers that
receive the discount; amending K.S.A. 2024 Supp. 66-101j and
repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2024 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 that the customer first receives service under the
discounted rate; or
(B) otherwise warrants a discounted rate based on any of the
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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;
(2) a peak demand that is reasonably projected to be at least 300
kilowatts within two years of the date that 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 that 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 25
megawatts within two years of the date that 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 that 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 exceed
20%, except that such discounts may be between 5% to and 30% in any
year 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.
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(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%, except that
such discounts may be between 20% to and 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.
(e) (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.
(f) On and after July 1, 2025, the commission shall not authorize an
electric public utility to commence implementation of a discounted electric
development rate pursuant to this section for any new or expanded facility
of an industrial or commercial customer unless such discounted rate is
sufficient to cover the incremental and variable cost to serve such
customer. Nothing in this subsection shall be construed to affect or limit
any discounted electric development rate that was first implemented prior
to July 1, 2025.
(g) 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. 2024 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)(h) 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
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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.
(h)(i) 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)(j) For the purposes of this section:
(1) "Electric public utility" means the same as 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.
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Sec. 2. K.S.A. 2024 Supp. 66-101j is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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