Evergy releases feasibility study into Pittsburg’s public utility idea

Pittsburg officials say study is flawed

For about the last two years, the city of Pittsburg has been looking into creating its own municipal utility company.

Part of that has been getting information from Westar Energy, which is now called Evergy, their current electricity supplier.

“All of a sudden, we got this feasibility study, which has a whole bunch of information that we didn’t ask for,” explains Pittsburg Deputy City Manager Jay Byers.

The study was paid for by Evergy, and goes over things like startup costs, acquisitions, maintenance, and what it would cost the city to buy power.

The study showed an estimated 130-150 million dollars to get the utility off the ground.

It also shows that it would end up costing customers more than 100 million dollars more over a twenty-year period, versus the city staying with Evergy.

Evergy says they put the study online because they wanted to be transparent with residents.

“We’re just wanting to be transparent in this process because we believe our customers do have a right to access the information and to learn about the process and how much it could potentially cost,” explains Kari West, Customer Solutions Manager for Evergy.

But city officials say those findings are completely opposite of what they have seen in their own studies.

The city did its own preliminary study through GE Warren in January.

At that time, the city was quoted an average rate of 57 dollars per megawatt-hour — versus the 76 dollars per megawatt-hour that Evergy used in their study.

“Those seem to be numbers intended to generate shock and awe. The first feasibility study indicated exactly the opposite [of the Evergy study],” says Byers. “So, it’s something we are gonna have to look at and analyze and say, ‘what are the differences between the two?'”

Since the first study in January, the city has had communication with two different energy companies and received quotes of 49 and 45 dollars per megawatt-hour.

“Understand that we’re not going to do this municipalization if it’s going to cost our citizens more money. We’re just simply not going to do it, “explains Byers. “But those numbers still need to be determined through a process that we’re following. And they [Evergy] seem to want to jump into that process really earlier than they should.”

Byers also thinks the start-up cost in the Evergy study is inflated, saying the estimates they received were millions less.

They did not, however, provide the exact number — saying they are still in negotiations with Evergy on what they may be able to purchase infrastructure for.

When asked if the city would put out that entire feasibility study, Byers said “maybe”

“We’re still in negotiations right now with Evergy. So, if we give Evergy all of our information, then we’d be at a competitive disadvantage in our negotiations with them,” says Byers.

Evergy is standing behind their numbers.

“We believe the third-party study that we’ve pulled together has the information based on current market analysis, current power analysis, and we’re confident in those numbers,” says West.

Evergy has also published the results of a survey of customers.

The survey references statistics from the feasibility study, and asks residents how much they support the municipal utility project under those circumstances.

“Evergy’s standpoint is we wanted to know what our customers thought. And to this point, no one’s really asked the customers, so we wanted to find out what information they needed to make an informed decision,” explains West.

City officials feel that the survey was biased as well by using questions that led to specific responses.

“We did ask a couple of people at the university to kind of review some of those questions, particularly the ones related to the city, and they did find that the questions seem to be leading,,. as opposed to questions that were designed to elicit an objective response,” says Byers.

KOAM also spoke with Byers about the city’s current progress in determining if a municipal utility will be viable.

He says they are still very far away from making any decisions.

He also says that the city has spent around 97 thousand dollars on researching the project so far.

“And it’ll be considerably more than that when we’re done. It’ll be a very expensive process to decide even if we should do this, so it’s not cheap. It is important though to note that whatever moneys the city spends at this point, if we establish the utility, the utility will pay back that money to the general fund.”

The decision to start a municipal utility will be made by the City Commission, but citizens will vote on a bond issue to purchase the infrastructure.

You can find links to the Evergy feasibility study, their survey, and links to documents by the City of Pittsburg below. Also shown is a response to the Evergy study by the company that did the city’s feasibility study in January.

Evergy feasibility Study: https://www.evergy.com/-/media/documents/concentric-preliminary-feasibility-study-pittsburg-municipalization-july-2019.pdf?la=en

Every resident survey: https://www.evergy.com/-/media/documents/pittsburg-research-survey-september-2019.pdf?la=en

City of Pittsburg January 2019 feasibility study results: https://www.pittks.org/public-power-for-pittsburg-ks/

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