Interest charge

KGS customers will see approximately $5 charge on invoices for winter storm costs

TOPEKA, Kan. (WIBW) – Kansas Gas Service customers will soon see charges of about $5 on their monthly bills to recover funds from the winter storm of 2021.

The Kansas Corporation Commission said Thursday, Aug. 18, it approved a settlement agreement and funding order that gives Kansas Gas Service the power to issue securitized bonds to recover $328 million in deferred costs from the 2021 winter storm. .

KCC noted that using low-interest securitized bonds is expected to save customers between $35 million and $46 million compared to traditional recovery rates.

The Board said the exact amount of winter weather recovery charges that KGS customers will see on their monthly bills will not be decided until the bonds are issued. He said the variables include length of term and interest rate based on current market conditions.

However, KCC said it’s estimated the monthly fee – to be labeled “Securitized Winter Cost” on invoices – will range from $4.87 to $6.42 over 7 to 10 years. Without securitized bonds, he said taxpayers would see a $9.04 fee on their bill each. month over five years, or $13.90 per month over three years using traditional rates.

During the February 2021 winter weather event, KCC said it ordered utilities to do everything possible to continue providing natural gas service to customers, defer charges, and then create a plan to customers to repay unusually high costs over time to minimize financial impact.

KCC stressed that it was in the public interest for KGS to incur extraordinary costs to ensure system integrity and continued service to customers.

Later in 2021, the Commission reported that the Kansas Legislature had passed the Utilities Financing and Securitization Act, which allows utilities to use securitized bonds to pay for extraordinary costs more favorably than traditional financing. .

KCC said wholesale natural gas prices are not regulated by members or any other government entity. He said Congress deregulated natural gas prices in the mid-1980s, meaning prices are determined by supply and demand.

The Commission said any product recovered by KGS as a result of state or federal investigations into possible market manipulation, price gouging, etc., will be passed on to customers.

To see Thursday’s order, click HERE.

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