Ongoing savings from 2018 merger exceed
projections, reduce the rate increase request by more than
half.
Today Evergy submitted a detailed rate review to the Missouri
Public Service Commission (MPSC). The requested rate adjustment
reflects investments to improve reliability, enhance customer
service and enable the company’s transition to cleaner energy
resources.
Missouri law requires Evergy to file a rate review to update
rates at least once every four years. If approved, this will be the
first base rate increase for Evergy Missouri customers in more than
five years. In recent years, Evergy has reduced operating costs and
is passing savings on to customers in this rate review at levels
greater than projected at the time of the merger. Including the
current rate review request, throughout the last decade Evergy
Missouri customers have experienced price increases that are well
under the average annual rate of inflation for the same time
period.
For Evergy Missouri Metro customers, the company is requesting
approximately a 5.2% increase to its base rates. For Evergy
Missouri West customers, the company is requesting approximately a
3.85% increase in base rates. The prices customers pay for electric
service are calculated based on actual costs the company incurs.
The filing today begins an 11-month process where regulators and
interveners will review, audit and evaluate the request to assure
the resulting prices reflect the cost of serving Evergy’s Missouri
customers. The process will include public hearings, which are yet
to be scheduled. To justify any price increase, Evergy must
demonstrate that the costs were warranted and prudent. For more
information on Evergy’s service areas, visit
https://www.evergy.com/manage-account/rate-information-link/service-areas.
“Since Evergy was formed in 2018, reducing operational costs to
help fund our investments and make our rates more competitive has
been one of our primary goals,” said David Campbell, Evergy
president and chief executive officer. “We’ve exceeded our merger
savings targets and are passing on those savings to customers as
promised. These savings have enabled us to avoid base rate
increases for five years. This year we’re asking to adjust our
rates to reflect and recover necessary investments we have made to
enhance reliability and sustainability and better serve our
customers.”
The most significant driver of the rate increase request is
focused infrastructure improvement aimed at enhancing reliability.
While Evergy has a track record of solid performance, as the
electric system ages, modern upgrades are needed to maintain and
improve reliability. For example, upgrades in advanced automation
technologies will reduce restoration times during outage events,
while recent enhancements in data analytics programs allow Evergy
to better model potential outage risk areas and target investments
and improvements accordingly.
“Our customers depend on the constant flow of electricity we
provide. In this part of the country, it’s important that we
continue to improve the grid, making it stronger and more resilient
to limit power outages from severe weather, and be better protected
against physical and cyber threats,” Campbell said. “This rate
request includes investments to improve reliability, such as
replacing aging electrical infrastructure with new technologies
that speed restoration by automatically detecting power outages and
quickly rerouting power to customers.”
Evergy’s requested rate review also seeks to address customer
interest in cleaner energy sources and more choice in electric rate
options. Today about half of Evergy’s energy comes from
emission-free sources. As Evergy makes the transition to cleaner,
more sustainable sources of energy, the company’s focus remains on
advancing that transition at the appropriate pace to ensure
reliability and affordability. For example, this rate review
includes recovery of the costs to retire one of the company's older
Missouri coal-fired power plants. In addition, Evergy is also
asking to give customers more choices in their electric rates.
Building on its successful time of use program, Evergy is seeking
to introduce additional rate options, including expanding time of
use options and a subscription pricing pilot, pre-payment options
and other sustainable rate programs.
The COVID pandemic and resulting economic crisis created an
urgent and unprecedented need for assistance. In 2020, Evergy
donated $1.8 million for COVID relief efforts at no cost to
Evergy’s customers. These donations were directed to 120 local
agencies to help with emergency efforts, economic development
programs, workforce training, and customer payment assistance.
Evergy’s COVID relief effort was in addition to its annual $6.5
million in community support to hundreds of agencies throughout
Evergy’s Missouri and Kansas service areas. Evergy’s community
support donations are not included in customer rates.
With new COVID federal dollars available for rental and utility
assistance, Evergy conducted approximately 500 outreach and social
media events in 2020 and 2021 to connect and advise customers with
bill assistance applications. Additionally, Evergy launched a
one-stop location on its website with all assistance programs,
links, helpful hints, and videos. Since 2020, these efforts have
helped secure more than $67 million in utility bill payment
assistance for Evergy customers.
In addition to the COVID relief efforts, Evergy continued to
safely operate its customer walk-in facility, Evergy Connect. With
health and safety protocols in place, Evergy provided assistance to
customers in need through face-to-face service and virtual
consultations. Since 2019, Evergy Connect has provided customized,
direct service to more than 27,000 customers, including billing and
payment assistance, energy-efficiency and weatherization tools and
other resources.
Evergy is also asking the MPSC to continue reflecting fuel and
purchased power increases and decreases in its Fuel Adjustment
Clause (FAC) on customer bills. The FAC allows Evergy to adjust
customers’ bills two times per year, up or down, based on actual
costs of fuel and purchased power and is also reset following each
rate review. As a result of substantially higher natural gas prices
and power costs, Evergy is asking for an additional 0.45% increase
for Evergy Missouri Metro customers and 4.46% for Evergy Missouri
West customers in this rate review.
About Evergy, Inc.
Evergy, Inc. (NYSE: EVRG) serves approximately 1.6 million
customers in Kansas and Missouri. We were formed in 2018 when
long-term local energy providers KCP&L and Westar Energy
merged. About half our power comes from emission-free sources. We
support our local communities where we live and work, and strive to
meet the needs of customers through energy savings and innovative
solutions.
Forward Looking Statements
Statements made in this document that are not based on
historical facts are forward-looking, may involve risks and
uncertainties, and are intended to be as of the date when made.
Forward-looking statements include, but are not limited to,
statements relating to Evergy's strategic plan, including, without
limitation, those related to earnings per share, dividend,
operating and maintenance expense and capital investment goals; the
outcome of legislative efforts and regulatory and legal
proceedings; future energy demand; future power prices; plans with
respect to existing and potential future generation resources; the
availability and cost of generation resources and energy storage;
target emissions reductions; and other matters relating to expected
financial performance or affecting future operations.
Forward-looking statements are often accompanied by forward-looking
words such as “anticipates,” “believes,” “expects,” “estimates,”
“forecasts,” “should,” “could,” “may,” “seeks,” “intends,”
“proposed,” “projects,” “planned,” “target,” “outlook,” “remain
confident,” “goal,” “will” or other words of similar meaning.
Forward-looking statements involve risks, uncertainties and other
factors that could cause actual results to differ materially from
the forward-looking information.
In connection with the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, Evergy, Inc., Evergy
Kansas Central, Inc. and Evergy Metro, Inc. (collectively, the
Evergy Companies) are providing a number of risks, uncertainties
and other factors that could cause actual results to differ from
the forward-looking information. These risks, uncertainties and
other factors include, but are not limited to: economic and weather
conditions and any impact on sales, prices and costs; changes in
business strategy or operations; the impact of federal, state and
local political, legislative, judicial and regulatory actions or
developments, including deregulation, re-regulation, securitization
and restructuring of the electric utility industry; decisions of
regulators regarding, among other things, customer rates and the
prudency of operational decisions such as capital expenditures and
asset retirements; changes in applicable laws, regulations, rules,
principles or practices, or the interpretations thereof, governing
tax, accounting and environmental matters, including air and water
quality and waste management and disposal; the impact of climate
change, including increased frequency and severity of significant
weather events and the extent to which counterparties are willing
to do business with, finance the operations of or purchase energy
from the Evergy Companies due to the fact that the Evergy Companies
operate coal-fired generation; prices and availability of
electricity in wholesale markets; market perception of the energy
industry and the Evergy Companies; the impact of the Coronavirus
(COVID-19) pandemic on, among other things, sales, results of
operations, financial condition, liquidity and cash flows, and also
on operational issues, such as the availability and ability of the
Evergy Companies’ employees and suppliers to perform the functions
that are necessary to operate the Evergy Companies; changes in the
energy trading markets in which the Evergy Companies participate,
including retroactive repricing of transactions by regional
transmission organizations (RTO) and independent system operators;
financial market conditions and performance, including changes in
interest rates and credit spreads and in availability and cost of
capital and the effects on derivatives and hedges, nuclear
decommissioning trust and pension plan assets and costs;
impairments of long-lived assets or goodwill; credit ratings;
inflation rates; the transition to a replacement for the London
Interbank Offered Rate (LIBOR) benchmark interest rate;
effectiveness of risk management policies and procedures and the
ability of counterparties to satisfy their contractual commitments;
impact of physical and cybersecurity breaches, criminal activity,
terrorist attacks and other disruptions to the Evergy Companies’
facilities or information technology infrastructure or the
facilities and infrastructure of third-party service providers on
which the Evergy Companies rely; ability to carry out marketing and
sales plans; cost, availability, quality and timely provision of
equipment, supplies, labor and fuel; ability to achieve generation
goals and the occurrence and duration of planned and unplanned
generation outages; delays and cost increases of generation,
transmission, distribution or other projects; the Evergy Companies’
ability to manage their transmission and distribution development
plans and transmission joint ventures; the inherent risks
associated with the ownership and operation of a nuclear facility,
including environmental, health, safety, regulatory and financial
risks; workforce risks, including those related to the Evergy
Companies’ ability to attract and retain qualified personnel,
maintain satisfactory relationships with their labor unions and
manage costs of, or changes in, retirement, health care and other
benefits; disruption, costs and uncertainties caused by or related
to the actions of individuals or entities, such as activist
shareholders or special interest groups, that seek to influence
Evergy’s strategic plan, financial results or operations; the
possibility that strategic initiatives, including mergers,
acquisitions and divestitures, and long-term financial plans, may
not create the value that they are expected to achieve in a timely
manner or at all; difficulties in maintaining relationships with
customers, employees, regulators or suppliers; and other risks and
uncertainties.
This list of factors is not all-inclusive because it is not
possible to predict all factors. You should also carefully consider
the information contained in our other filings with the Securities
and Exchange Commission (SEC). Additional risks and uncertainties
are discussed in the Annual Report on Form 10-K for the year ended
December 31, 2020 filed by the Evergy Companies with the SEC, and
from time to time in current reports on Form 8-K and quarterly
reports on Form 10-Q filed by the Evergy Companies with the SEC.
Each forward-looking statement speaks only as of the date of the
particular statement. The Evergy Companies undertake no obligation
to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise, except
as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220107005462/en/
Media Contact: Gina Penzig Manager, External
Communications Phone: 785-508-2410 Gina.Penzig@evergy.com Media
line: 888-613-0003
Investor Contact: Cody VandeVelde Director, Investor
Relations Phone: 785-575-8227 Cody.VandeVelde@evergy.com
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