Kansas creates plan to recover deferred energy payments

Kansas creates plan to recover deferred energy payments
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TOPEKA, Kan. – The Kansas Corporation Commission (KCC) approves a settlement agreement allowing Kansas Gas Service (KGS) to recover winter storm costs over time, using low-interest bonds.

The Kansas Gas Service deferred $366 million in natural gas costs during last February’s winter weather event.

The KCC ordered the utility company to continue providing natural gas service to customers and defer charges.

Under the terms of the agreement, KGS will utilize Securitized Utility Tariff Bonds to reduce the monetary impact on customers. In 2021, the Kansas Legislature passed the Utility Financing and Securitization Act, making this plan possible.

Utility Financing and Securitization Act; Senate Sub. for HB 2072

The KCC will review the plan to ensure the lowest possible bond costs for customers. The application and review process could take six to eight months.

Kansas Gas Service sent the following statement on the agreement.

Kansas Gas Service is pleased with the Order from the Kansas Corporation Commission on its securitization mechanism to recover costs from the February 2021 winter storm. We prioritize keeping our customers safe and warm during these extreme weather events and aim to recover the unprecedented costs from the high natural gas prices due to the storm with fairness and minimal impact to customers.

Until the securitization process is complete, the exact dollar amount KGS customers will see on their monthly bills or the length of the payment period is unknown. Estimates range anywhere from $5 to $7 per month for a period of 5-10 years.

A second-order, addressing a proposed unanimous settlement on a waiver of penalties for gas marketers and transportation customers under KGS’ Tariff will be issued by March 7.  Courts held a settlement for this case on Feb. 4.