Kansas: Evergy pushes to price solar out of the state

Kansas utilities fought to kill net metering and managed to get incentives for solar owners slashed. Not satisfied, one of the utilities, Evergy, tried to impose new fees on solar owners that the Kansas Supreme Court described as illegal price discrimination. Evergy's amended rate proposal, which repackaged those very same fees, was rejected by state regulators, but is still being charged to customers in some parts of the state.  

Bryn Huxley-Reicher

Former Policy Analyst, Frontier Group

Utilities and powerful special interests are working – often out of public view – to undermine rooftop solar power across America. In this series, excerpted from our report Blocking Rooftop Solar, we tell the stories of five utility attacks on rooftop solar, shining sunlight on the tactics utilities are using to limit the growth of local renewable energy.

Despite the fact that Kansas is one of the 10 sunniest states in the country, there were fewer than 1,300 residential solar energy systems in the state at the end of 2019, and just 0.23% of the state’s power came from solar energy.

This is likely due in part to the state’s utility rate design, which has allowed Evergy – Kansas’ largest utility – to charge solar customers large extra fees, reducing the benefits for those who already have solar panels and discouraging other Kansans from adding solar power to their homes.

Kansas utilities, along with the American Legislative Exchange Council (ALEC) and the Koch brothers’ political affiliate, Americans for Prosperity, pushed an initial attack on solar in 2014.1 Both Westar Energy and Kansas City Power & Light – the two utilities that in 2018 merged to form Evergy – as well as Empire District Electric, the third IOU in the state – lobbied for bills introduced in the Kansas House and Senate to eliminate the state’s net metering policy, which allowed customers with solar panels to be fairly compensated for extra power they supply to the utility’s grid.

In 2014, Kansas utilities spent $116,500 on campaign contributions to state legislators. Kansas City Power & Light gave $1,000 to the 2014 campaign of Representative Dennis Hedke, the chairman of the Kansas House Standing Committee on Energy and the Environment, and $500 to the 2012 campaign of Senator Forrest Knox, the chairman of the Kansas Senate Committee on Utilities, while Westar Energy gave $500 to each. These two committees discussed the net metering bills.

The legislature did not end up repealing net metering outright but passed an amended bill that reduced the value of the power solar owners sell back to the grid and reduced the size of solar installations that qualify for net metering. These reductions in compensation occurred despite the fact that only 201 utility customers were actively using net metering for rooftop solar or small wind installations.

But Evergy’s attacks on solar didn’t end at this point. In October and December 2018 (in different geographical areas), Evergy instituted a demand fee – a monthly charge based on peak electricity use – for customers with residential solar installations. Evergy charged customers $3 in colder months and $9 in warmer months per kilowatt of peak demand each billing period, regardless of the total amount of energy used. This led to extra charges that were sometimes more than $100 per month, and caused a huge drop in the number of Kansans hooking solar panels to the grid.

The demand fee was approved by the Kansas Corporation Commission (KCC), the utility regulatory body in Kansas. Both Westar Energy and Kansas City Power & Light contributed to the 2010 and 2014 campaigns of Governor Sam Brownback and his Lieutenant Governor Jeff Colyer – a combined $8,363 in 2010 and $12,107 in 2014. Governor Brownback appointed two of the KCC Commissioners who approved the demand fee, and Jeff Colyer, who briefly became Governor when Sam Brownback secured a Trump administration posting, appointed the third.

In April 2020, the Kansas Supreme Court ruled that the utilities and the KCC had engaged in illegal price discrimination against customers with solar installations – charging only customers who generate their own power an extra fee unconnected from possible extra services they require – and remanded the issue back to KCC. Kansans with solar panels, however, continued to pay the illegal fee, because Evergy claimed it could not change prices without approval from the KCC.

Even after engaging in illegal price discrimination and being soundly defeated in the Kansas Supreme Court, Evergy is still trying to stop the growth of solar power in Kansas. In November 2020, prior to KCC hearings for Evergy’s rate design update in response to the Kansas Supreme Court Ruling, Evergy offered two new proposals. Evergy’s preferred option is to reinstate the demand fee, repackaged as a $3-per-kilowatt monthly “grid access fee” charged to all customers based on the size of any distributed generation capacity they own. The grid access fee would only charge customers with generating capacity – everyone else would pay $0 – but Evergy’s proposal suggests that the utility believes the slight change will allow the proposal to pass legal muster.

In case that new fee was rejected by the KCC, Evergy had a back-up proposal: a $35 per month minimum service charge for all of its customers. This would represent a 240% increase from the current $14.50 service fee Evergy charges, and increase monthly bills for over 140,000 low-income Kansans and many senior citizens – who already struggle to afford energy costs – as well as for those who need separate meters to power detached barns or garages.

The KCC received nearly 1,100 calls, emails and letters from Kansans who almost uniformly opposed Evergy’s proposed rate increases. On February 25, 2021, the KCC ruled unanimously against both Evergy’s demand fee and minimum charge proposals in its Central territory (former Westar service area). While this was a win for solar owners in this part of Kansas, solar owners in other parts of the state are still paying the demand fee.

To learn more about the efforts of special interest groups to undermine rooftop solar, and about how the public and policymakers can support the continued growth of local renewable energy, read our report: Blocking Rooftop Solar.

Image: Annual average daily solar energy resources in Kansas. Lighter shades indicate less solar energy available, darker shades indicate more. Map courtesy of the National Renewable Energy Laboratory.

  1. Note: the Koch brothers were from Kansas and have a history of heavy involvement there in promoting fossil fuels over renewables.↩︎

Bryn Huxley-Reicher

Former Policy Analyst, Frontier Group

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