OVERLAND PARK (KSNT) – Additional costs will be added to Kansans’ residential and commercial customer billing statements next month, according to the Kansas Gas Service.
A separate line item labeled “Winter Event Securitized Cost” will be placed on billing statements as a result of securitization of the extraordinary costs associated with a winter storm in February 2021. Kansas Gas Service reports it experienced high natural gas costs when there was a significant increase in natural gas market prices from high demand during the storm.
By purchasing natural gas to keep Kansas homes and businesses warm during the storm, the Kansas Gas Service says it made safety its top priority. The cost Kansas Gas Service pays for its gas supply is a pass-through to customers without markup.
The Kansas Corporation Commission approved a settlement agreement and financing order to allow Kansas Gas Service to issue securitized bonds to recover the extraordinary costs from the 2021 storm.
“Knowing the high cost of gas would have made our customers’ bills significantly more than usual, we worked to find a solution to minimize the monthly impact to customers,” said Jeff Husen, Vice President of Rates and Regulatory for ONE Gas, parent company of Kansas Gas Service. “Spreading the costs over a longer time frame helps keep customers’ monthly bills lower and more manageable than recovery through traditional approaches to setting rates.”
The monthly securitization charge for residential customers is $5.64 and is estimated to decrease to $5.11 at the first adjustment occurring mid-year in 2023. The monthly charge will be updated, either upwards or downwards, depending on collections, twice a year over a 10-year term. The company estimates that securitization will save customers $36.3 million.
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In February 2021, a winter storm caused more than 100,000 Kansans to lose power to their homes and businesses. The energy crisis caused long-term problems for energy providers more than a year later.