The Kansas Corporation Commission has approved a settlement agreement that will allow Kansas Gas Service to recover costs resulting from a cold snap in February, 2021, when temperatures dropped to around -17.
The settlement and a financing order will give KGS authorization to issue securitized bonds to recover $328 million in deferred costs resulting from the 2021 winter storm. The use of the low-interest bonds is expected to save ratepayers $35 million to $46 million, compared to recovery through traditional rates. The KCC said without securitized bonds, ratepayers would see charges of $9.04 a month over five years or $13.90 per month over three years using traditonal ratemaking.
The exact amount of the recovery charge that KGS customers will see on their monthly bills will not be determined until the bonds are issued.
Natural gas prices skyrocketed as a result of the cold snap. The KCC ordered utility companies to defer charges and develop a plan to allow customers to pay the costs over time to minimize the financial impact.
