Tag: Kansas Gas Service

Kansas Gas Service customers to see increase of about $4.87 to $6.42 a month to recover costs from 2021 storm

A settlement agreement will allow Kansas Gas Service to charge customers an additional $4.87 to $6.42 a month for seven to 10 years to pay for costs associated with the 2021 winter storm.

The Kansas Corporation Commission has approved a settlement agreement and financing order giving Kansas Gas Service authorization to issue securitized bonds to recover $328 million in deferred costs and associated carrying costs resulting from the 2021 winter storm. The use of low interest securitized bonds is expected to save ratepayers $35 to $46 million compared to recovery through traditional rates, according to the KCC.


The exact amount of the winter weather recovery charge KGS customers will see on their monthly bills won’t be determined until the bonds are issued, according to the KCC. Variables include the length of term and interest rate based on current market conditions.

It is estimated the monthly charge, to be labeled “Winter Event Securitized Cost” on customer bills, will range from $4.87 to $6.42 over seven to ten years, according to a KCC news release. Without securitized bonds, ratepayers would see charges of $9.04 per month over five years or $13.90 per month over three years using traditional ratemaking.


During the winter weather event, the KCC ordered regulated utilities to do everything possible to continue providing natural gas service to its customers, defer the charges, and then develop a plan to allow customers to pay the unusually high costs over time to minimize the financial impact.

The Kansas Corporation Commission emphasized it was in the public interest for KGS to incur the extraordinary costs to ensure the integrity of the gas system and ensure continuous service to its customers.


The 2021 Kansas Legislature later passed the Utility Financing and Securitization Act, which allows utilities to use securitized bonds to pay for extraordinary costs at more favorable terms than traditional financing.


Wholesale natural gas prices are not regulated by the KCC or any other government entity. The U.S. Congress deregulated natural gas prices back in the mid-1980s. Prices are market driven by supply and demand. The Kansas Corporation Commission has stated that any proceeds recovered by KGS resulting from state or federal investigations into possible market manipulation or price gouging, will be passed on to customers.

Part of Wyandotte County is served by Kansas Gas Service, while some of Wyandotte County is served by Atmos Energy.


Today’s orders are available here: Settlement Agreement at https://estar.kcc.ks.gov/estar/ViewFile.aspx/20220818103048.pdf?Id=667fd54d-1779-4b33-99ec-065c1143d1ba&utm_medium=email&utm_source=govdelivery and Financing Order at https://estar.kcc.ks.gov/estar/ViewFile.aspx/22-466_Financing_Order.pdf?Id=72fa8fb3-f763-4562-bf76-b39149549772&utm_medium=email&utm_source=govdelivery.

A recording of today’s KCC business meeting featuring Kansas Corporation Commissioner comments on these orders, is available on the KCC YouTube channel at https://www.youtube.com/watch?v=JSVO2kn00gA.

Kansas regulators approve natural gas utility’s plan to recoup $366 million from customers

The KCC estimates monthly bills could rise, on average, between $5 and $7

by Allison Kite, Kansas Reflector

Customers of Kansas’ largest natural gas utility will see their bills go up in the wake of last winter’s deep freeze — but it’s still unclear by how much and for how long.

Kansas regulators on Tuesday approved an agreement with the Kansas Gas Service to recoup $366 million in excess natural gas costs, incurred to keep residents’ heat on when temperatures last February plunged below freezing for days on end and natural gas prices rose by 200 times almost overnight.

During the freeze, which resulted in deaths and dayslong outages in Texas, the Kansas Corporation Commission ordered utilities to do everything they could to keep providing gas and electric service and defer the costs.

“A lesser response could have resulted in catastrophic property damage and serious public safety implications, including potential loss of life,” the commission said in a news release. “When extraordinary costs are unavoidable and necessary to benefit the public, it is in the public interest to allow recovery of such costs.”

The agreement represented a settlement in which KGS agreed to trim some of its carrying costs on the sum from the storm. It brought the total Kansans will pay down from $390 million.

But KGS customers won’t know how much more they’ll pay — or for how long — until the gas utility files for securitization and issues bonds to be repaid over five to 10 years. The KCC estimated monthly bills would rise, on average, between $5 and $7.

A separate settlement between KGS’ large customers, like school districts and manufacturers, is still to come and could reduce the burden on residential customers by as much as $50 million, said David Nickel, executive director of the Citizens’ Utility Ratepayer Board, which advocates for residential and small business customers of Kansas utilities.

Nickel said CURB supported moving quickly to reach a deal for customers to repay the funds with the hopes of getting low interest rates. He acknowledged “it seems like a lot of money, and it is,” and said the board was concerned about potential manipulation or price-gouging in the natural gas market.

If ongoing investigations by Kansas Attorney General Derek Schmidt or federal regulators reveal manipulation, the settlement says any recouped funds need to go back to ratepayers, something Nickel emphasized is important to CURB.

Nickel said the negotiations also yielded a promise from KGS to develop a payment plan program for low-income customers by the end of this year.

Nickel said it’s significant that Kansans didn’t lose heat en masse or suffer deaths because of outages.

“I can assure you that I would pay more than $600 over a period of 10 years to keep people that I know and I love safe and alive,” he said.

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0
See more at https://kansasreflector.com/2022/02/08/kansas-regulators-approve-natural-gas-utilitys-plan-to-recoup-366-million-from-customers/.